Erie Indemnity beats on third-quarter profit but misses revenue by $180 million
Earnings of $3.48 a share topped forecasts by $0.03, while sales of $1.07B fell well short of the $1.25B analysts expected.
Chart: ERIE, one-minute prices, three sessions
Erie Indemnity's third-quarter profit beat is a narrow one, and it sits beside a revenue miss that is far wider. Earnings came in at $3.48 a share, $0.03 above forecasts, but revenue of $1.07B was $0.18B below the $1.25B analysts expected.
The two numbers do not tell the same story. A sales shortfall of well over 10 per cent set against an earnings beat of about 1 per cent means the revenue line is the weaker signal, and the gap between the two matters more than the beat. A profit that clears estimates without the sales behind it is one later quarters have to confirm.
The earlier record is steadier. In the second quarter, net income rose to $180.3 million, or $3.45 a share, from $3.34 a year earlier, according to the company's results release. Professional fees fell $5.0 million as it used fewer outside services for technology projects, and acquisition and underwriting support costs fell $3.9 million.
The third-quarter revenue miss is therefore the number to judge the result by. Management's webcast at 10 a.m. Eastern on Friday is where that will be tested.
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