Why Fidelis Insurance Stock Blasted 13% Higher on Friday

The broader finance sector has had its ups and downs recently, to put the situation mildly. One of the brighter spots was the quarterly earnings report dropped late Thursday by Fidelis Insurance Group (FIHL 13.04%). Thanks to solid beats on both the top and bottom lines, investors flocked to the shares the following day, sending their price 13% higher. And that was on a good day for the wider stock market, with the S&P 500 index rising by nearly 1%.

Fourth-quarter revenue and premiums rose at double-digit rates

Fidelis closed out 2023 with a fourth quarter that saw it earn just under $554 million in revenue, quite the improvement from the less than $429 million in the same period of 2022. That was on the back of a 32% year-over-year increase in gross premiums written, to nearly $784 million.

The insurance company’s net operating income, a non-GAAP profitability measure, didn’t see quite the same lift but rose nevertheless. That line item improved by 5% over the one-year stretch to more than $135 million, or $1.15 per share.

The two leading headline results far exceeded analyst expectations. On average, pundits tracking Fidelis stock estimated the company’s revenue would total slightly over $526 million, and its per-share net operating income would land at only $0.72.

Solid performance from a new arrival to the market

In Fidelis’ earnings release, the company quoted CEO Dan Burrows as saying that “The fourth quarter was a strong finish to a milestone year for Fidelis in which we became a public company and strengthened our position as a global specialty insurer. Utilizing our nimble yet disciplined approach, we capitalized on attractive opportunities, achieved strong rate increases, and delivered excellent financial performance.”

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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