Convincing year-over-year gains in core fundamentals weren’t satisfying enough for Mr. Market.
Insurance sector mainstay Progressive (PGR -5.84%) wasn’t feeling like a safe investment on Wednesday. Investors sold out of the stock to leave it with a nearly 6% price decline on the day, following the company’s latest quarterly earnings release. The benchmark S&P 500 index did much better, closing the session 0.4% higher.
Double-digit improvements, but…
For its third quarter, Progressive’s net premiums written rose by 10% year over year to just under $21.4 billion. Generally accepted accounting principles (GAAP) net income also saw a double-digit gain, rising 12% to $2.6 billion, or $4.45 per share.
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Despite the leaps in those key fundamentals, both fell short of analyst expectations. The consensus pundit estimate for net premiums written was $21.8 billion while that for per-share net income was $5.05.
Much of Progressive’s progress during the quarter came from increases in volume. In September alone, the number of policies grew year over year in every one of its categories, with auto insurance being a particularly strong performer. All told that month, the company had just over 38 million policies in force, 12% higher than in September 2024.
Wait for the call
In the earnings release, Progressive provided little commentary about the quarter. It seems investors and other interested parties will have to wait until management holds a conference call to discuss the figures; this is scheduled to occur the morning of Tuesday, Nov. 4.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Progressive. The Motley Fool has a disclosure policy.
