Chubb Beats on EPS But GAAP Results Lag

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Chubb (NYS: CB) reported earnings on Jan. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Chubb met expectations on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased, and GAAP earnings per share contracted significantly.

Gross margins improved, operating margins shrank, and net margins dropped.

Revenue details
Chubb reported revenue of $2.97 billion. The nine analysts polled by S&P Capital IQ wanted to see revenue of $2.97 billion. Sales were 1.8% lower than the prior-year quarter's $2.85 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $1.63. The 21 earnings estimates compiled by S&P Capital IQ forecast $1.58 per share on the same basis. GAAP EPS of $1.04 for Q4 were 21% lower than the prior-year quarter's $2.02 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 47.5%, 1,730 basis points better than the prior-year quarter. Operating margin was 18.6%, 1,380 basis points worse than the prior-year quarter. Net margin was 13.5%, 470 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.97 billion. On the bottom line, the average EPS estimate is $1.46.

Next year's average estimate for revenue is $12.28 billion. The average EPS estimate is $5.77.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 530 members out of 554 rating the stock outperform, and 24 members rating it underperform. Among 230 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 222 give Chubb a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Chubb is outperform, with an average price target of $70.67.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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