- Fairfax Financial misses 1Q EPS estimates with an EPS of $30.82 against the estimated $39.62.
- The Net income also fell short of the estimate; $776.5 million against the expected $1.21 billion.
- Pretax profit recorded was $1.06 billion as opposed to the estimated $1.47 billion.
- Gross written premiums surpassed estimates at $8.06 billion, higher than the estimated $7.74 billion.
- Net premiums written were also higher than the estimates; $6.30 billion against $6.16 billion.
- The Book value per basic share recorded was lower than expected at $945.44 instead of the estimated $968.53.
- Net investment losses were registered at $58.5 million for the quarter.
- Insurance revenue recorded for the quarter amounted to $7.69 billion.
- The property and casualty insurance and reinsurance operations’ adjusted operating income increased to $977.1 million from $843.0 million in the first quarter of 2023. Overall, this reflects increased interest and dividends and strong core underwriting performance.
- The constituent of net losses on investments mainly included mark-to-market losses on bonds amounting to $318.8 million due to rising interest rates. However, marked-to-market gains on common stocks did offset most of the losses, amounting to $275.1 million.
- Gross premiums written showed a growth of 12.8% and net premiums written grew by 11.2%. This can be attributed to the acquisition of Gulf Insurance which added $649.5 million in gross premiums written and $334.0 million in net premiums written.
A look at Fairfax Financial Holdings Ltd Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 2 | |
| Growth | 5 | |
| Resilience | 2 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on the Smartkarma Smart Scores, Fairfax Financial Holdings Ltd has a positive long-term outlook. With high scores in Growth and Momentum, the company is positioned well for future success. Fairfax’s focus on achieving a high rate of return on invested capital aligns with its strong growth outlook, indicating potential for long-term value creation. Additionally, its momentum score reflects the company’s current strength and positive market sentiment. While the scores for Dividend and Resilience are lower, the overall outlook remains optimistic given the robust performance in other key areas.
As a holding company involved in insurance, reinsurance, and investment management, Fairfax Financial Holdings Ltd is strategically positioned to capitalize on its strengths in growth and momentum. By prioritizing disciplined underwriting and total return investments, Fairfax aims to deliver above-average returns over the long term. This approach, coupled with its strong Growth and Momentum scores, suggests that Fairfax has the potential to continue building shareholder value and solidifying its position in the market.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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