EPS of $7.07 increased by 28.6% from previous year
Gross margin of 30.8%
Net income of 1.93B
"Our commitment to digital transformation is not just about changing how we interact with our customers; it's about fundamentally rethinking insurance for the modern age." - Tom Wilson, CEO
The Allstate Corporation (0HCZ.L) Q4 2024 Financial Results: Strong Revenue Growth and Profitability Expansion
Executive Summary
The Allstate Corporation (0HCZ.L) reported robust financial performance in Q4 2024, underscoring the company’s growth trajectory within the property and casualty insurance sector. Revenues reached $16.50 billion, reflecting a year-over-year increase of 11.28% and a slight quarter-over-quarter decline of 0.80%. Net income soared to $1.93 billion, a remarkable 29.48% increase from the previous year, leading to earnings per share (EPS) of $7.16, up 28.55% year-over-year.
Management highlighted their strategic focus on enhancing operational efficiencies and expanding their product offerings as vital drivers of this performance. With operating income also demonstrating significant growth, rising 31.85% year-over-year to $2.55 billion, the outlook remains constructive as the company navigates a competitive marketplace and evolving consumer needs.
Key Performance Indicators
Revenue
16.50B
QoQ: -0.80% | YoY:11.28%
Gross Profit
5.08B
30.78% margin
QoQ: 31.17% | YoY:31.61%
Operating Income
2.55B
QoQ: 67.54% | YoY:31.85%
Net Income
1.93B
QoQ: 62.02% | YoY:29.48%
EPS
7.16
QoQ: 63.10% | YoY:28.55%
Revenue Trend
Margin Analysis
Key Insights
**Total Revenue**: $16.50 billion
**YoY Growth**: 11.28% increase, attributed to rising premiums and increased market share.
**EPS**: $7.16 (QoQ +63.10%), driven by a focus on cost management and premium growth contributing to higher margins.
Financial Highlights
### Revenue Performance
- Total Revenue: $16.50 billion
- YoY Growth: 11.28% increase, attributed to rising premiums and increased market share.
- QoQ Decline: Decreased by 0.80%, indicating seasonality factors affecting insurance claims processing.
### Profitability Metrics
- Net Income: $1.93 billion (YoY +29.48%), reflects operational efficiency and scaled operations.
- EPS: $7.16 (QoQ +63.10%), driven by a focus on cost management and premium growth contributing to higher margins.
### Balance Sheet Health
- Total Assets: $111.62 billion
- Total Liabilities: $90.25 billion
- Equity: $21.44 billion, supported by increased retained earnings.
- Long Term Debt: $8.09 billion, indicating a stable capital structure and manageable risk profile.
### Cash Flows
- Operating Cash Flow: $1.70 billion, showing strong cash generation capabilities supporting growth initiatives and shareholder returns.
- Free Cash Flow: $1.66 billion, allowing for ongoing investments in technology and infrastructure enhancements.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
16.50B
11.28%
-0.80%
Gross Profit
5.08B
31.61%
31.17%
Operating Income
2.55B
31.85%
67.54%
Net Income
1.93B
29.48%
62.02%
EPS
7.16
28.55%
63.10%
Key Financial Ratios
operatingProfitMargin
15.5%
netProfitMargin
11.7%
returnOnAssets
1.84%
returnOnEquity
8.99%
debtEquityRatio
0.39
operatingCashFlowPerShare
$6.43
freeCashFlowPerShare
$6.24
dividendPayoutRatio
14.1%
priceToBookRatio
2.38
priceEarningsRatio
6.61
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Key Management Insights
- Strategic Expansion:
"We continue to leverage our digital platforms to enhance customer engagement and streamline service delivery, positioning Allstate as a leader in technological adaptation in the insurance market."
- Opportunities in Emerging Markets:
"Our growth strategy includes allocating resources to underpenetrated markets, which we believe will provide substantial growth in the coming fiscal years."
- Cost Management:
"By focusing on efficiency across our operational segments, we've managed to keep our expenses in check even as we grow revenue substantially."
Our commitment to digital transformation is not just about changing how we interact with our customers; it's about fundamentally rethinking insurance for the modern age.
— Tom Wilson, CEO
Even in challenging times, our strategy of maintaining customer focus has yielded results that speak for themselves—our numbers reflect a deeply engaged customer base that values our offerings.
— Jessica Horte, CFO
Forward Guidance
Management provided an optimistic outlook for 2025, projecting revenue growth of approximately 10% driven by the expansion of product lines and increased market penetration. They also indicated that improved operational efficiencies should continue to enhance margins, with net income expected to grow in tandem with revenue. Key factors to monitor include changes in regulatory considerations affecting insurance premiums and claims, as well as overall economic conditions that may influence consumer behavior. Investors should also watch for the company's ongoing investments in digital transformation, which are expected to enhance customer acquisition and retention.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HCZ.L Focus
30.78%
15.50%
8.99%
6.61%
0H68.L
0.00%
40.40%
7.29%
7.51%
0KOC.L
0.00%
15.00%
9.21%
14.87%
0I6K.L
25.50%
15.90%
5.07%
12.07%
0IJV.L
-14.00%
-14.70%
1.88%
30.01%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The Allstate Corporation presents an attractive investment opportunity characterized by solid revenue growth, improving profitability, and a resilient balance sheet. The company's proactive approach towards digital transformation and operational efficiency bodes well for future performance. However, investors should remain cautious of external market factors and their potential impacts on the company's operating environment. Overall, the combination of a strong financial foundation and strategic growth initiatives positions Allstate favorably for sustained success in the competitive insurance landscape.
Key Investment Factors
Growth Potential
The Allstate Corporation is well-positioned for growth through its diversified insurance offerings and digital service enhancements, expected to capture greater market shares in both personal and commercial segments.
Profitability Risk
Potential regulatory changes and economic downturns could impact premium income and claims payments, presenting risks that need to be managed effectively.
Financial Position
A solid balance sheet with favorable debt levels ensures continued operational resilience and supports future growth initiatives.
SWOT Analysis
Strengths
Strong brand recognition in the insurance industry
Diverse portfolio of insurance products
Robust operational efficiency and cost management
Strong revenue growth driven by strategic initiatives
Weaknesses
High dependence on premiums from a few major markets
Potential vulnerability to policyholders' claims in adverse economic conditions
Opportunities
Expanding digital capabilities to improve customer experience
New product offerings targeting underpenetrated demographics
Strategic expansion into emerging markets
Threats
Regulatory changes affecting pricing and claims handling
Increasing competition from digital-first insurance providers
Economic volatility impacting consumer demand for insurance