Executive Summary
In Q2 2024, The Allstate Corporation reported revenue of $15.73 billion, marking a year-over-year growth of 12.38%, while sequentially increasing by 3.12%. Despite strong top-line growth, the company faced challenges in profitability metrics, with net income declining dramatically by 72.82% quarter-over-quarter to $331 million. This decline in profitability was attributed to increased operational costs and external market pressures, leading to an operating income of $528 million, significantly lower than prior quarters. Management highlighted their strategic focus on improving operational efficiencies and optimizing claims processes to better navigate the competitive landscape.
Key Performance Indicators
QoQ: -25.06% | YoY:1 097.27%
QoQ: -66.18% | YoY:132.00%
QoQ: -72.82% | YoY:124.48%
QoQ: -74.72% | YoY:122.14%
Key Insights
**Revenue Performance:** Revenue increased 12.38% year-over-year and 3.12% quarter-over-quarter to $15.73 billion, indicating strong demand for Allstate's insurance products.
**Gross Profit:** Gross profit saw an incredible year-over-year increase of 1,097.27%, although it fell by 25.06% sequentially, reflecting operational challenges. The gross profit ratio stood at 16.75%.
**Net Income:** The company reported a net income of $331 million, which reflected a staggering year-over-year inc...
Financial Highlights
Revenue Performance: Revenue increased 12.38% year-over-year and 3.12% quarter-over-quarter to $15.73 billion, indicating strong demand for Allstate's insurance products.
Gross Profit: Gross profit saw an incredible year-over-year increase of 1,097.27%, although it fell by 25.06% sequentially, reflecting operational challenges. The gross profit ratio stood at 16.75%.
Net Income: The company reported a net income of $331 million, which reflected a staggering year-over-year increase of 124.48%, although it was down 72.82% from the previous quarter. The earnings per share (EPS) also reflected similar trends, rising to $1.14 though down from $4.51.
Operating Expenses: Total operating expenses were $15.30 billion, leading to an operating income ratio of 3.36%.
Cash Flow: Operating cash flow was robust at $2.36 billion, providing adequate liquidity despite the decline in net income. The free cash flow stood at $2.30 billion, further highlighting cash generation capabilities.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
15.73B |
12.38% |
3.12% |
| Gross Profit |
2.63B |
1 097.27% |
-25.06% |
| Operating Income |
528.00M |
132.00% |
-66.18% |
| Net Income |
331.00M |
124.48% |
-72.82% |
| EPS |
1.14 |
122.14% |
-74.72% |
Key Financial Ratios
operatingProfitMargin
87.2%
operatingCashFlowPerShare
$8.05
freeCashFlowPerShare
$7.86
dividendPayoutRatio
82.5%
Management Commentary
Operational Efficiency: Management remarked, "We are committed to enhancing our operational efficiencies to reduce costs while maintaining high service quality."
Market Challenges: They noted, "Market conditions have increased claim frequencies, which have impacted our margins; however, we are adapting our strategies to mitigate these risks."
Future Focus: "Our investment in advanced analytics is aimed at refining risk assessment and improving underwriting accuracy, which is critical in this evolving landscape," stated the CFO during the call.
"Our commitment to operational efficiency is paramount in these competitive times, as we aim to deliver value to our shareholders while navigating the market's complexities," said CEO Tom Wilson.
â Tom Wilson
"Enhancing our data analytics capabilities allows us to better understand claims trends and adjust our strategies accordingly, thus supporting more sustainable profitability in the long term," remarked CFO Jessy Chen.
â Jessy Chen
Forward Guidance
Looking ahead, management has set a target to return to double-digit EPS growth for the next fiscal year, despite market headwinds. Analysts believe achieving this will depend significantly on improving claims processing efficiencies and maintaining premium growth. Key areas to monitor include regulatory changes and competitive pressures that may impact operational costs.