NYSE$OSG

Octave Specialty Group Inc · Q4 2020 earnings

Q4 2020 earnings · · Investor relations

Briefing

Reported a net loss of $14 million and adjusted earnings of $4 million.

Ambac Financial Group reported a Net Loss attributable to common stockholders of $14 million or $0.31 per diluted share and Adjusted Earnings of $4 million or $0.08 per diluted share for the quarter ended December 31, 2020. Book Value per Share increased $0.98 to $23.57 and Adjusted Book Value per Share increased $0.61 to $20.05 from September 30, 2020 to December 31, 2020.

  • Net Loss of $14 million or $0.31 per diluted share and Adjusted Earnings of $4 million or $0.08 per diluted share for the Quarter Ended December 31, 2020
  • Book Value per Share increased $0.98 to $23.57
  • Adjusted Book Value per Share increased $0.61 to $20.05 from September 30, 2020 to December 31, 2020
  • Fourth quarter 2020 results were not impacted by the previously announced acquisition of 80% of the membership interests of each of Xchange Benefits, LLC and Xchange Affinity Underwriting Agency, LLC

Headline financials

Total Revenue

$88M

Previous: $91M-3.3%
EPS (adj)

$0.08

Previous: -$1.91+104.2%
Net Income

-$14M

Previous: -$110M+87.3%
Operating Income

-$13M

Previous: -$111M+88.3%
Gross Profit

$62M

Previous: $90M-31.1%
Cash & Equivalents

$20M

Previous: $24M-16.7%
Total Assets

$13.2B

Previous: $13.3B-0.8%
Stock-Based Comp

$3M

Previous: $2.3M+30.4%

Revenue & EPS history

Ambac · Revenue · Quarterly

$88M

Q4 2020-3.3%vs Q4 2019
Beat estimate in 8 of 16 quarters(50%)
ActualEstimate

Revenue by segment

Ambac · $14.6M total across 1 segment · Q3 2023

  • Insurance Distribution
    $14.6M+100.0%

Forward guidance

Ambac executed under its platform diversification, three pillar strategy which consists of (I) specialty program insurance, (II) managing general agency/underwriting, and (III) other insurance and insurance related businesses, that meet preestablished criteria and that are expected to generate long-term stockholder value with attractive risk-adjusted returns.

Tailwinds

  • Ambac launched Everspan Group, a specialty participatory fronting program insurance business
  • Everspan Group's receipt of an AM Best Financial Strength Rating of A-(Excellent)
  • Ambac acquired 80% of the membership interests of Xchange
  • Xchange is a specialty property and casualty Managing General Underwriter
  • AAC reduced its nominal debt and accrued interest outstanding by approximately $76 million.

Headwinds

  • the highly speculative nature of AFG’s common stock and volatility in the price of AFG’s common stock
  • Ambac's inability to realize the expected recoveries, including RMBS litigation recoveries, included in its financial statements which would have a materially adverse effect on Ambac Assurance Corporation's (\"AAC\") financial condition and may lead to regulatory intervention
  • failure to recover claims paid on Puerto Rico exposures or realization of losses in amounts higher than expected
  • increases to loss and loss expense reserves
  • inadequacy of reserves established for losses and loss expenses and possibility that changes in loss reserves may result in further volatility of earnings or financial results

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2020

Historical avgQ4 2020

+0.4%

Avg return

Earnings day

+1.5%

Avg return

5 days after

-0.4%

Avg return

30 days after

47%

24 / 51 earnings

Positive

+23.0%

Q1 2024

Best reaction

-19.9%

Q1 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-3.7%+26.9%+24.9%
Q3 2025+15.6%+9.6%-3.7%
Q2 2025-15.9%-0.8%+9.8%
Q1 2025-19.9%-3.7%-18.6%
Q4 2024-10.8%-22.4%-25.8%
Q3 2024+11.0%+6.3%+13.9%
Q1 2024+23.0%+23.8%-5.9%
Q4 2023+1.6%-2.9%-6.2%
Q3 2023+7.2%+17.1%+19.9%
Q2 2023-5.1%-1.9%-8.3%
Q1 2023-3.1%-3.1%-7.1%
Q4 2022+5.4%+4.3%-7.3%
Q3 2022+0.7%+12.0%+21.7%
Q2 2022+15.5%+33.6%+31.3%
Q1 2022+6.2%+15.1%+51.7%
Q4 2021-6.5%-14.0%-38.3%
Q3 2021-4.0%-2.5%-7.9%
Q2 2021-3.7%-1.0%-3.7%
Q1 2021-11.4%-16.5%-9.2%
Q4 2020-1.1%+0.2%-1.2%
Q3 2020+12.2%+10.0%+36.8%
Q2 2020+2.5%+4.7%-3.5%
Q1 2020-16.4%-25.1%-15.3%
Q4 2019-1.6%-2.3%-40.8%
Q3 2019-0.1%-0.4%+1.3%
Q2 2019+0.1%+1.6%+1.8%
Q1 2019-8.5%-8.8%-20.0%
Q4 2018+3.6%+2.3%-7.9%
Q3 2018-10.1%-12.3%-22.3%
Q2 2018+5.8%+5.4%+2.0%
Q1 2018+8.3%+10.2%+17.5%
Q4 2017+0.1%-0.9%+3.4%
Q3 2017-13.9%-9.7%-3.2%
Q2 2017-0.5%-4.4%-10.7%
Q1 2017-5.6%-5.8%-7.1%
Q4 2016-0.5%+1.8%-15.4%
Q3 2016+9.8%+14.5%+35.6%
Q2 2016-4.1%-3.9%+1.3%
Q1 2016-1.2%
Q4 2015+9.0%
Q3 2015-6.2%
Q2 2015+14.4%
Q1 2015+6.4%
Q4 2014-0.9%
Q3 2014+5.8%
Q2 2014-2.4%
Q1 2014+0.5%
Q4 2013-0.2%
Q3 2013+7.3%
Q4 2012+7.3%
Q2 2013-1.4%
Q1 2013
Q3 2012
Q2 2012
Q1 2011
Q1 2012
Q4 2010
Q4 2011
Q3 2010
Q3 2011
Q2 2010
Q2 2011
Q1 2010

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