Markel Group Q3 Earnings Miss Estimates, Revenues Increase Y/Y

Markel Group Inc. MKL reported third-quarter 2024 net operating earnings per share of $17.34, which missed the Zacks Consensus Estimate by 21%. However, the bottom line increased 4.7% year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Markel’s third-quarter results reflected improved net investment income, reduced operating expenses and more favorable development on prior accident years loss reserves, offset by lower earned premiums.Markel Group Inc. Price, Consensus and EPS Surprise Markel Group Inc. price-consensus-eps-surprise-chart | Markel Group Inc. QuoteQuarterly Operational Update   Total operating revenues of $3.7 billion missed the Zacks Consensus Estimate by 1.3%. The top line rose 1.4% year over year on higher product revenues, services and other revenues and higher net investment income.Earned premiums decreased 1% year over year to $2.1 billion in the quarter. The modest decrease was due to lower gross premium volume in the Reinsurance segment. The figure was lower than our estimate of $2.2 billion.Net investment income increased 22% year over year to $233.3 million in the third quarter. The rise was due to higher interest rates and increased investment holdings in 2024. The figure was higher than our estimate of $217.6 million and the Zacks Consensus Estimate of $216 million.Total operating expenses of Markel decreased 1.9% year over year to $3.2 billion, primarily due to lower losses and loss adjustment expenses and amortization of intangible assets. The figure matched our estimate.MKL’s combined ratio improved 270 basis points (bps) year over year to 96.4 in the reported quarter. Excluding losses attributed to natural catastrophes, the decrease in the consolidated combined ratio was primarily attributable to more favorable development on prior accident years loss reserves within the Insurance segment. The figure matched the Zacks Consensus Estimate.Segment UpdateInsurance: Gross premiums increased 2% year over year to $2.4 billion. The uptick was driven by new business growth and more favorable rates within personal lines, programs, marine and energy and credit and surety product lines. It was partially offset by lower premium volume within select lines of U.S. general liability and professional liability product lines. The figure matched our estimate.Underwriting profit came in at $109.5 million, which surged more than four-fold year over year. The combined ratio improved 450 bps year over year to 94.1. It included $61 million of net losses and loss adjustment expenses attributed to Hurricane Helene.Reinsurance: Gross premiums decreased 4% year over year to $121.1 million. The decrease was driven by the impact of unfavorable premium adjustments within credit and surety and general liability product lines in 2024 compared to favorable premium adjustments in 2023. It was partially offset by new business within professional liability product lines. The figure was lower than our estimate of $383.3 million.Underwriting loss was $33.5 million, wider than a loss of $5.8 million reported in the year ago. The combined ratio deteriorated 1,130 bps year over year to 113.4 in the third quarter.Markel Ventures: Operating revenues of $1.2 billion improved 1% year over year. The increase in operating revenues was primarily driven by the impact of higher prices at one of consumer and building products businesses and increased demand at equipment manufacturing businesses, as well as the contribution from Valor, which was acquired in June 2024. The improvements in operating revenues were largely offset by the impact of decreased demand and lower prices across a number of other businesses, most notably at one of transportation-related businesses.Operating income of $106.6 million decreased 18% year over year due to the impact of lower revenues and operating margins across a number of businesses, most notably at one of transportation-related businesses and construction services businesses. The decreases in segment operating income were partially offset by the impact of higher revenues and operating margins at equipment manufacturing businesses and one of consumer and building products businesses.Financial UpdateMarkel exited the third quarter with investments, cash and cash equivalents and restricted cash and cash equivalents of $34.6 billion as of Sept. 30, 2024, up 12% from 2023-end.The debt balance increased 15.2% year over year to $4.3 billion as of Sept. 30, 2024. The debt-to-capital ratio was 20% as of Sept. 30, 2024, which remained unchanged from 2023-end. Shareholders' equity was $17 billion at third-quarter 2024-end, up 13.5% from 2023-end.Net cash provided by operating activities was $2.1 billion in the first nine months of 2024, up 7% year over year.Zacks RankMarkel currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Some Other ConglomeratesHoneywell International Inc. HON reported third-quarter 2024 adjusted earnings of $2.58 per share, which surpassed the Zacks Consensus Estimate of $2.50. The bottom line increased 8% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.16 per share, down 5%. Total revenues of $9.73 billion missed the consensus estimate of $9.90 billion. The top line increased 6% from the year-ago quarter, driven by strength in the Aerospace Technologies segment. Organic sales also increased 3% year over year.Aerospace Technologies’ quarterly revenues were $3.91 billion, up 12% year over year. Our estimate for the segment’s revenues was $3.95 billion. Industrial Automation revenues fell 5% year over year to $2.50 billion. Our estimate for segmental revenues was pegged at $2.62 billion. Building Automation revenues totaled $1.75 billion, up 14% year over year. Our estimate for the segment’s revenues was $1.70 billion.ITT Inc. ITT third-quarter 2024 adjusted earnings of $1.46 per share surpassed the Zacks Consensus Estimate of $1.43. The bottom line jumped 7% year over year. Total revenues of $885.2 million beat the consensus estimate of $876 million. The top line increased 7.7% year over year. Organic sales rose approximately 5.5% year over year, buoyed by higher friction original equipment volume and rail demand in KONI in the Motion Technologies segment.Revenues from the Industrial Process segment totaled $333.8 million, up 19.3% year over year. Organic sales increased 6.1% and adjusted operating income grew 7.1% on a year-over-year basis. Our estimate for segmental revenues was pinned at $321.6 million. Revenues from the Motion Technologies segment amounted to $344.9 million, implying a year-over-year decrease of 4.1%. The lower sales were attributable to the divestiture of the Wolverine unit in July 2024. Organic revenues grew 4.7%. Adjusted operating income increased 2.1%. Our estimate for segmental revenues was pinned at $360.6 million. 3M Company MMM reported third-quarter 2024 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. Both the bottom and top lines increased on a year-over-year basis. 3M delivered adjusted earnings of $1.98 per share, which surpassed the Zacks Consensus Estimate of $1.93. The metric increased from $1.68 per share reported in the year-ago quarter.The company’s net revenues of $6.3 billion surpassed the consensus estimate of $6.1 billion. The metric increased 0.4% year over year. Organic sales declined 0.1%. Foreign currency translation had a negative impact of 0.3%, while divestitures boosted the top line by 0.8%. Region-wise, organic sales in the Americas inched up 0.3% year over year, while Asia Pacific organic sales increased 1.7%. Organic sales from businesses in Europe, the Middle East and Africa decreased 4.2%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Honeywell International Inc. (HON): Free Stock Analysis Report 3M Company (MMM): Free Stock Analysis Report ITT Inc. (ITT): Free Stock Analysis Report Markel Group Inc. (MKL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks