Hot Finance stock to watch: American Financial Group Inc (NYSE: AFG)

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American Financial Group Inc (NYSE: AFG) stock rose 0.02% in the pre-market session of February 4th, 2020 (Source: Google finance) after the company posted better than expected earnings for the fourth quarter of FY 19. The company has reported 2019 fourth quarter net earnings attributable to shareholders of $211 million compared to a net loss of $29 million in the 2018 fourth quarter. Core net operating earnings were $203 million for the 2019 fourth quarter, compared to $159 million in the 2018 fourth quarter. The increase in core operating earnings in Annuity Segment was partially offset by lower core operating earnings in the Property and Casualty insurance operation. AFG had approximately $1.1 billion of excess capital (including parent company cash of approximately $165 million) at the end of December, 2019.

AFG in the fourth quarter of FY 19 has reported the adjusted earnings per share of $2.22, beating the analysts’ estimates for the adjusted earnings per share of $2.21, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 35.9 percent to $2.02 billion in the fourth quarter of FY 19. Property and Casualty insurance net earned premiums increased to $1.37 billion from $1.27 billion in the prior year while the analysts had expected revenues to be of $1.31 billion for the quarter.

Moreover, the Specialty P&C insurance operations have reported an underwriting profit of $89 million for the fourth quarter 2019 compared to $102 million in the fourth quarter of 2018. The lower underwriting profitability in the Property and Transportation Group, was mainly due to lower year-over-year earnings in the crop operations, which was partially offset by higher year-over-year underwriting profits in the Specialty Casualty and Specialty Financial Groups. The Property and Transportation Group have reported an underwriting loss of $2 million in the fourth quarter of 2019, compared to an underwriting profit of $64 million in the comparable prior year period. The lower underwriting results of this group are due to record levels of prevented planting claims in the crop operations during the quarter. Catastrophe losses for this group were $7 million in the fourth quarter of 2019. The Specialty Casualty Group have reported an underwriting profit of $69 million in the 2019 fourth quarter compared to $22 million in the comparable 2018 period, mainly due to a reduction in the core underwriting loss at Neon, which resulted mainly from lower year-over-year catastrophe losses.

AFG expects full-year earnings to be in the range of $8.75 to $9.25 per share while the analysts expect annual earnings to be of $8.97 per share.

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