Zacks_Analysts' Blog : AXA Increases Profits - Analyst Blog

Insurance giant AXA (AXA) announced a surge in its 2009 net income to €3.61 billion from €923 million last year, due to lower writedowns on investments.

Total revenues were down 3.0% to €90.1 billion, led by a 4.0% decline in life and savings and 25% decline in asset management revenues, partially offset by a slight increase in Property and Casualty revenues.

Underlying Earnings were down 6% to €3,854 million, as the recovery in Life & Savings, primarily due to improved Variable Annuity hedging margin, was offset by Property & Casualty impacted by an adverse market cycle and Asset Management which suffered due to lower average assets.

Adjusted Earnings were down 8% to €3,468 million, mainly as a result of lower underlying earnings. On the back of solid operating results, management announced a 38% increase in dividend.

Shareholders' equity was €46.2 billion, up €8.8 billion, benefiting from a €2.4 billion capital increases, a €5.0 billion increase in net unrealized capital gains and €3.6 billion net income for the period, partially offset by a €1.0 billion increase in pension deficits and €0.8 billion of 2008 dividend payment.

Solvency ratio was 171%, up 44 points compared to December 31, 2008, benefiting from earnings capital increases and favorable market conditions, mainly on fixed-income assets as a result of credit spreads tightening.

Debt gearing decreased by 8 points to 26% as a result of shareholders’ equity increase and €4.1 billion decrease in net financial debt.