Europe's biggest insurance company turned in a 'strong' performance in 2015 and has expressed its confidence about good business this year, too. But Allianz investors hoped for more and sold the stock on the news.
Munich-based Allianz insurance group on Friday reported a net 2015 profit of 6.616 billion euros ($7.4 billion), which was 6.3 percent more than in the previous year of 2014. Underlying or operating profit grew by 3.2 percent to 10.735 billion euros on a 2.4-percent increase in revenues to 125.2 billion euros.
Allianz chief executive (CEO) Oliver Bäte described the result as a "strong preformance in increasingly challenging operating conditions," and added that the German insurer's business was "healthy and well-diversified." Finance chief Dieter Wemmer said that full-year earnings were driven primarily by a very strong fourth quarter.
"Strong performance in our insurance operations plus performance fees in asset management in the fourth quarter drove full-year operating profit close to the top of the target earnings range," Wemmer said. "Active risk management led to a strong capital ratio ... leaving us well prepared for today's volatile markets."
Good is not enough
In spite of solid earnings last year and a positive outlook for 2016 in which Allianz expects "strong earnings," shares in the company were among the biggest losers on the Frankfurt stock exchange on Friday, shedding around 4.0 percent to hit an intraday low of 130.20 euros in a generally steady market.
"At first glance, the fourth-quarter result closely met expectations while, the dividend is probably marginally below what was hoped for," said DZ Bank analyst, Thorsten Wenzel.
Other analysts, including Baader Bank Helvea analyst Daniel Bischof were also disappointed. He told the news agency Reuters that the Allianz earnings were "solid, but failed to excite" shareholders. Therfore, Bischof only affirmed his "hold" rating on the stock, noting how net income missed forecasts due to a goodwill impairment on its life business in Asia.
Allianz announced that it planned to pay a dividend of 7.30 euros per share for 2015, up from 6.85 euros for the previous year.
uhe/kd (Reuters, dpa, AFP)