Employers Holdings (EIG) to report earnings tomorrow: here is what to expect

What happened

Employers Holdings, a workers' compensation insurer, reports earnings Wednesday afternoon. Last quarter it reported $220.2 million in revenue, down 10.6% year on year, beating analysts' revenue expectations and earnings-per-share estimates. Analysts expect revenue to decline 20% this quarter.

Confirmed

Global impact / market context

Revenue is the money a company brings in from sales. A 20% expected drop would be a sharp reversal from last year's 6.8% growth, so the report will show whether the workers' compensation insurer's sales are shrinking and whether it can still beat profit estimates.

Analyst inference

Peers in property and casualty insurance, which covers damage to property and liability claims, have already reported. RLI grew revenue 5.3% and beat estimates by 0.5%, while Travelers reported flat revenue and beat by 0.7%, suggesting varied demand across the segment.

Analyst inference

What to watch

1. Employers Holdings has missed Wall Street's revenue estimates multiple times over the last two years, and analysts reconfirmed their estimates in the last 30 days. Confirmed
2. Watch whether revenue falls near the expected 20% decline and whether earnings per share, which is profit divided by shares outstanding, again beats estimates. Proposed
3. Compare Employers Holdings with RLI and Travelers, whose revenue growth ranged from flat to 5.3%, to see whether weakness is company-specific or shared across the property and casualty insurance industry. Analyst inference

Evidence

• stockstory.org