J.P. Morgan Comments On XL Group 2Q EPS

According to J.P. Morgan, XL Group XL reported 2Q EPS of $0.76 versus the estimate of $0.50 and consensus estimate of $0.47, while book value per share increased 6.3% (versus the +3.2% estimate) due to stronger investment gains and, to a lesser extent, higher operating income. J.P. Morgan said that, relative to the estimate, the upside in EPS was primarily the result of lower catastrophe losses and stronger development (due in part to releases associated with its semi-annual reserve review), with other factors essentially neutral. “Core underwriting results were weaker than expected, although this was largely due to higher attritional property losses, while production outpaced estimates in both insurance (8% on an underlying basis) and reinsurance (due primarily to catastrophe and European professional lines).” XL Group closed yesterday at $22.27.