American Financial, Cincinnati Financial surprise analysts

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Carl Lindner III and Craig Lindner are co-CEOs of American Financial Group Inc.

Steve Watkins

Staff Reporter- Cincinnati Business Courier

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Cincinnati's two biggest publicly traded insurers each surprised analysts by posting better third-quarter profits than expected.

Downtown-based American Financial Group Inc. posted 32 percent growth in core net operating earnings, to $1.40 per share. Those results sprinted past analysts estimates that called for American Financial to earn $1.16 per share, according to Zacks Investment Research Inc.

Its revenue grew 10 percent to $1.6 billion.

American Financial co-CEOs Carl Lindner III and Craig Lindner pointed out the core earnings of $127 million set a record.

"We are pleased to see higher year-over-year core earnings in both our specialty P&C group and our annuity segment and strong growth in net written premiums in our specialty P&C businesses," the Lindners said in a news release.

Meanwhile, Cincinnati Financial's operating income shot up 21 percent to $140 million, or 85 cents per share. That was a whopping 42 percent higher than analysts' estimates of 60 cents per share. Its revenue rose 11 percent to $1.3 billion.

Catastrophe losses stayed low and its investments performed well, CEO Steven Johnston said.

"Strong third-quarter net and operating income has us in good shape heading into the fourth quarter," Johnston said in a news release. "A 17 percent increase in dividend income from our high-quality stock investments plus a 1 percent increase in interest income from our bond portfolio led to a 4 percent increase in third-quarter 2014 investment income versus a year ago."

American Financial's stock slipped 5 cents to $59.44 in Wednesday afternoon trading, while Cincinnati Financial's stock dipped 4 cents to $49.27.

Watkins covers banking and finance, insurance and sports business