Q4 and FY results tomorrow - predictions?

[dartmonkey]

Through Q3 they had $1.25b  in net earnings for a total of $3.80b for the past 3 quarters, compared to $2.94b for Q1-3 in 2024.

 

Operating earnings (ignoring changes in the equity portfolio), before interest and taxes, was $2.01b, or $4.52b for Q1-3, compared to $4.59b for Q1-3 in 2024.

 

Market cap at the end of Q3 was $37.3b, and book value was $25.7b, for a P/B of 1.45. Market cap is now about $38b, according to Yahoo, almost identical to end of Q3, although it might be down if there have been a lot of share repurchases.

 

So what are we going to get for Q4? Do we hit $5b in earnings, with another $1.2b from Q4, and $6b in operating earnings? (Watsa said that $5b in operating earnings were foreseeable for the next few years, but I think this is a minimum, not a central estimate.*)

 

Q4 was quite on the insurance/reinsurance side. The Eurolife $250m capital gain will likely be in Q1 2026, not 2025. But the sale of 25m shares of ORLA, acquired at an average price of about $52.0 and sold at $17.60, should have generated about C$310m pre-tax, say US$181m post-tax. If we had the same $540m in UW profit, $586m in interest and dividends, and $217m in share of earnings from associates, like in Q3, that would bring us to about $1.5b post-tax with the ORLA gain, so $12.b seems like an easy bar.

 

 

*Actually, it was Peter Clarke: "We continue to benefit from a stable base of annual operating income of approximately $5 billion, and we expect, of course, no guarantees it is sustainable for the next three to four years, with $2.5 billion from interest and dividend income, $1.5 billion from underwriting profit with normalized catastrophe losses, and $1 billion from associates and non-insurance companies." (Q3 earnings call). 

Edited February 18 by dartmonkey
25m shares of ORLA sold, not 44m

[serkapon]

1 hour ago, dartmonkey said:

acquired at an average price of about $52.0 and sold at $17.60

that seems wrong? or maybe I'm crazy 

[Maverick47]

3 minutes ago, serkapon said:

that seems wrong? or maybe I'm crazy 

I think it’s just a misplaced decimal point…Avg share price of $5.20, sold at $17.60.

[SafetyinNumbers]

1 hour ago, dartmonkey said:

ORLA, acquired at an average price of about $52.0 and sold at $17.60, should have generated about C$544m pre-tax, say US$318m post-tax

ORLA is marked to market every quarter so the gain will only be from the mark at the end of Q3. 

[Hoodlum]

I am thinking ~$65/share in diluted earnings for Q4, but this could vary depending on the Q4 Reserve Release.  I am probably more interested in reading this year's annual report as there will be more to review that usual with all of the business activity from the past year.

[dartmonkey]

5 hours ago, SafetyinNumbers said:

ORLA is marked to market every quarter so the gain will only be from the mark at the end of Q3. 

Yes, good point. Acquisition price about $5.20 (not $52.0, sorry for the typo), share price end of Q3 was $10.80, so while the pre-tax gain on sale of those 25m shares at $17.60 was C$319m, the gain since Q3 would only be $171mm. Still a big contribution, but thanks for the correction, almost half the gains would have already been booked by Q3. So if UW and interest and dividends and share of associates' earnings come in at the same level in Q4 as in Q3, that would put us close $1.2b for the quarter, of $5b for the year.

 

I thought maybe Eurobank's earnings would have improved in Q3 over Q2, but this is not so: Q1: E314, Q2: E377, Q3: E345. Fairfax in Q4 should include its share of Eurobank's Q3 earnings and these will be strong but actually not quite as strong in Q3 as in Q2.

Edited February 18 by dartmonkey
I mistakenly said they sold 44m shares, but it was 25m.

[SafetyinNumbers]

33 minutes ago, dartmonkey said:

I thought maybe Eurobank's earnings would have improved in Q3 over Q2, but this is not so: Q1: E314, Q2: E377, Q3: E345. Fairfax in Q4 should include its share of Eurobank's Q3 earnings and these will be strong but actually not quite as strong in Q3 as in Q2.

Is Poseidon still reporting quarterly earnings? They also come in in a quarter lag. 

[Hoodlum]

5 minutes ago, SafetyinNumbers said:

Is Poseidon still reporting quarterly earnings? They also come in in a quarter lag. 

 

I have not seen anything for past 2 quarters from Poseidon/Seaspan Corp.

[Crip1]

Fearless prediction, because if I am wrong, nothing bad will happen to me.

 

Share price will move up a little tomorrow, nothing special. Then, early to middle of next week the market will effectively say "Heeey, Fairfax seemed to have another good quarter, we'd better bid it up 5% or more over the next few days".

 

-Crip

 

 

[cwericb]

15 minutes ago, Crip1 said:

Fearless prediction, because if I am wrong, nothing bad will happen to me.

 

Share price will move up a little tomorrow, nothing special. Then, early to middle of next week the market will effectively say "Heeey, Fairfax seemed to have another good quarter, we'd better bid it up 5% or more over the next few days".

 

-Crip

 

 

Haha. The delayed reaction is not as bad as it used to be.

 

I remember some years ago when the stock price took three days to react to good results and ericopoly and I were laughing about how easy it was to make a quick buck on the predictable delay on price movement. I made a quick few bucks on the 10 shares I bought, then he told me he had bought 10,000 shares. Sigh...

Edited February 19 by cwericb

[gfp]

23 hours ago, SafetyinNumbers said:

Is Poseidon still reporting quarterly earnings? They also come in in a quarter lag. 

 

They stopped reporting publicly a little while after this filing -

https://app.quotemedia.com/data/downloadFiling?webmasterId=101533&ref=319139026&type=HTML&symbol=ATCO&cdn=d4b79532d803edf57ac8a11399e02df1&companyName=Atlas+Corp.&formType=6-K&dateFiled=2025-05-05

 

 

"The decision to seek to redeem these securities, voluntarily delist from Nasdaq and the NYSE and deregister from the SEC was made after careful consideration of the benefits and drawbacks of continued listing by the board of directors of Atlas and the board of directors of Poseidon Corp., which owns all of the common shares of Atlas. "

[hardcorevalue]

What do you guys have as street estimates for q4 not that this figure really matters (but I'm seeing different numbers)