Travelers Earnings Beat Estimates. Why the Stock Is Dropping.

The insurance company topped earnings expectations for the sixth consecutive quarter. (Dreamstime)

Key Points

• Travelers reports third-quarter adjusted earnings of $8.14 a share, exceeding the $6.34 consensus.
• Net premiums written for Travelers totaled $11.47 billion, a 1% increase, but below forecasts of $11.81 billion.
• Travelers shares fall following the earnings report.

Shares of Travelers fell Thursday after the property and casualty insurer reported mixed quarterly results.

The company posted adjusted earnings of $8.14 a share for the third quarter, surpassing Wall Street’s consensus call for $6.34. It topped topped earnings expectations for the sixth consecutive quarter, according to FactSet.

However, net premiums written totaled $11.47 billion, up 1% from the prior year but below the $11.81 billion forecast by Wall Street. Instead, better-than-expected investment income and a decline in catastrophe losses appeared to drive the strong earnings.

Catastrophe losses totaled $402 million for the quarter. They hit $939 million for the same period last year, due largely to damage from Hurricane Helene and severe wind and hail storms.

Travelers stock was down 5.4% in premarket trading. Shares have jumped 12% this year as of Wednesday’s close, while the Dow Jones Industrial Average has risen 8.7%.

Write to Nate Wolf at nate.wolf@barrons.com