How did UVE's Q4 earnings surprise investors?

**Universal Insurance Holdings Inc (UVE) experienced a negative earnings surprise in Q4.** Here's a detailed analysis: 1. **Earnings Performance**: - UVE reported an adjusted loss of $0.73 per common share for Q4, which is a significant increase from the $0.16 loss per share in the same quarter of the previous year. - This resulted in a substantial negative earnings surprise, with analysts expecting a loss of $1.03 per share, but the actual loss was $0.73, surpassing expectations by $0.30. 2. **Revenue Growth**: Despite the earnings shortfall, UVE achieved a 5.4% year-over-year increase in core revenue, reaching $381.4 million. This growth was driven by higher net premiums earned, net investment income, and commission revenue. 3. **Premiums and Policy Growth**: - Direct premiums written increased by 8% to $574.4 million, up from the previous year's $531.6 million. - Direct premiums earned rose by 7% to $507.7 million, compared to $474.4 million in the same quarter last year. - Net premiums earned also saw a 4.4% increase, reaching $345.7 million. 4. **Expense and Loss Ratios**: The net combined ratio rose to 116.9%, up 6.2 points from the previous year quarter, indicating higher net losses and expenses. The net loss ratio increased by 4.7 points to 91.7%, primarily due to higher weather losses from hurricane Helene. 5. **Shareholder Returns**: UVE's share repurchase activity was notable, with the company purchasing 226,000 shares at an aggregate cost of $4.4 million, demonstrating a commitment to returning value to shareholders. 6. **Stock Performance and Analyst Ratings**: Following the earnings release, UVE's stock experienced a 9.3% decline this quarter but had gained 25.8% year-to-date. Analysts currently hold a "buy" consensus rating on the stock, with a median 12-month price target of $25.00. In conclusion, while UVE's Q4 performance showed revenue growth and strategic expansion, the significant increase in losses and underwriting income led to a negative earnings surprise. The company's strong revenue performance and shareholder returns efforts may help mitigate investor concerns to some extent.