Employers Holdings Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of workers comp insurance provider Employers Holdings (NYS: EIG) were reaching for the stars today, gaining as much as 13% in intraday trading after the company reported third-quarter earnings.

So what: Total revenue for the third quarter was up 11% from last year and the $113 million reported was above the $111 million that analysts were expecting. On the bottom line, after backing out amortization of deferred reinsurance gains, per-share profit was $0.20, up considerably from last year's $0.13. Analysts were looking for $0.10 in earnings per share.

Now what: Employers' combined ratio so far this year has been 115.3%, which is up from last year and far from attractive. Like other insurers, the company also faces headwinds from the rocky economic climate, volatile capital markets, and low interest rates. The improved bottom line is certainly a good sign for investors, but they'll want to watch for broad, consistent signs that Employers' business is actually moving in the right direction.

Want to keep up to date on Employers Holdings?Add it to your watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story