Earnings Analysis for HIG – Detailed Review
Revenue Analysis
Total and Operating Revenue: HIG’s operating revenue has shown fluctuations across the observed quarters. From a recent peak in 2024 Q1 at $6.4 billion, a slight decrease is noted from $6.323 billion in 2023 Q4, $6.101 billion in 2023 Q3, further declining to the lowest of $6.017 billion in 2023 Q2. The trend reflects periodic adjustments in the company’s revenue streams.
Gross Profit Margins: While explicit gross profit margins are not provided directly, the consistent equivalence of total and operating revenue suggests a streamlined operational model, though fluctuations in total expenses highlight variable cost management efficiency.
Cost Management
Total Expenses: Total expenses peaked at $5.489 billion in 2024 Q1; this shows a progressive increase when compared to previous quarters, each displaying a has a decreasing trend from $5.373 billion in the preceding quarter. This suggests rising costs possibly associated with operational or administrative activities.
Profitability Analysis
EBITDA: Not explicitly provided but can be inferred from EBIT and depreciation. For the most recent quarter (2024 Q1), estimated EBITDA would be approximately $1.088 billion (EBIT of $961 million plus depreciation of $127 million).
Pretax Income: Shows a decreasing trend from a high of $950 million in 2023 Q4 to $672 million by 2023 Q2, and a recovery to $911 million by 2024 Q1.
Net Income: Net Income metrics remain robust, showing an overall stable profitability with $753 million in 2024 Q1, despite minor fluctuations in earlier quarters.
Cash Flow Indicators
Reconciled Depreciation: Reconciled Depreciation costs are relatively stable, ranging around $127 to $129 million each quarter, suggesting consistent capital asset depreciation practices.
Interest Expense: Remains consistent across the quarters at $50 million, indicating stable financing costs.
Taxation
Tax Rate: There is variation in the effective tax rates, ranging from about 18% to 20%, which reflects in differing tax provision figures accordingly.
Tax Provisions: Tax provisions peaked at $179 million in 2023 Q4 but interestingly decreased to $125 million by 2023 Q2, then increased to $158 million by 2024 Q1.
Shareholder Metrics
Earnings Per Share (EPS): There is a modest fluctuation in EPS, with Diluted EPS peaking at $2.51 in 2023 Q4 and dipping to $1.73 by 2023 Q2. This reflects periodic changes in profitability and diluted share counts.
Average Shares: Diluted average shares slightly decreased from 318.6 million in 2023 Q1 to 302.6 million in 2024 Q1, which can positively impact EPS when net income is stable.
Net Income Available to Common Stockholders: Slightly reduced from $766 million in 2023 Q4 to $748 million in 2024 Q1.
Conclusion
Although revenue figures and operating metrics display minor variability, HIG maintains a stable profitability and cash flow position. The increase in total expenses might be an area to watch and manage to ensure sustained profitability. Shareholder returns as reflected by EPS show potential sensitivity to share count adjustments and operational performance changes.
Appendices
Supporting data tables and calculations are derived directly from the financial data provided, focusing on key reported figures across the specified periods.