Travelers Profit Falls -51% Due to Superstorm Sandy Costs; Beats Wall Street View (TRV)

Insurance provider The Travelers Companies, Inc. (TRV) reported its fourth-quarter earnings on Tuesday, posting a steep drop in profits due to superstorm Sandy boosting claims costs. However, the company was still able to exceed analysts’ expectations.

The New York, New York-based company said its fourth quarter net income was $304 million, or 78 cents per share, down -51% from $618 million, or $1.51 per share, earned in the same period a year earlier. Operating income for the quarter, which excludes some investment income, was 72 cent per share, exceeding the Wall Street view of 14 cents per share according to Bloomberg.

Superstorm Sandy had a huge effect on Travelers and the insurance industry as a whole. Some analysts believe that the storm will costs the insurance industry as much as $25 billion. For Travelers, after-tax catastrophe losses in the quarter were $689 million compared to losses of $68 million in the year earlier period.

Revenue for the quarter was up +2% to $6.48 billion compared to $6.37 billion a year earlier. Wall Street analysts were expecting revenue to be $5.34 billion.

Travelers shares were up $2.37, or +3.11%, during pre-market trading on Tuesday. The stock is up +23.9% over the past year.

The Bottom Line
Shares of Travelers (TRV) have a 2.41% dividend yield, based on Friday’s closing stock price of $76.31. The stock has technical support in the $72 price area. The shares are trading at all-time highs.

The Travelers Companies, Inc. (TRV) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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