Chubb Corp., the insurer of businesses and high-end homes, advanced the most in six months after fourth-quarter profit beat analysts’ estimates and the company announced a $1.3 billion share repurchase plan.
Chubb climbed 3.2 percent to $82.89 at 4:01 p.m. in New York, a record-high closing price. Operating profit, which excludes some investment results, was 16 cents a share, the Warren, New Jersey-based firm said yesterday in a statement, beating by 62 cents the average estimate of 21 analysts in a Bloomberg survey.
The insurer said that 2013 operating profit will probably be in the range of $6.40 to $6.80 a share, compared with the average estimate of $6.26 in a Bloomberg survey of analysts.
“The combination of Chubb’s brand equity, the stability of its earnings results and the transparency of its disclosure augur for a premium among its peers,” Josh Shanker, a research analyst at Deutsche Bank AG, said in a research note today in which he upgraded the insurer to buy. He estimated the company will post an operating profit of $6.40 a share in 2013.
Full-year profit for 2012 fell 7.9 percent to $1.55 billion from $1.68 billion, the firm said. Chubb’s fourth-quarter investment income slid to $365 million from $391 million a year earlier as lower interest rates limited what the company earned on its municipal-bond and corporate-debt portfolios.
The latest repurchase plan replaces a program announced last year that authorized buying back as much as $1.2 billion in stock. About $979 million was repurchased under last year’s program, the company said.
Chief Executive Officer John Finnegan said he plans to complete the latest buyback plan by January of next year.
Chubb has gained 22 percent in the last 12 months, compared with the 23 percent advance of the 81-company Standard & Poor’s 500 Financials Index.