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Protective Life Corp. (PL - Analyst Report) reported second quarter 2013 net operating earnings of 96 cents per share, three cents ahead of the Zacks Consensus Estimate of 93 cents per share. Earnings also increased 13% year over year.
 
The earnings beat came from strong investment income, strong earnings in the variable annuity line, favorable mortality in life marketing and better-than-expected results in the Asset Protection segment. Partially offsetting the strong results was the adverse impact of several items and adjustments in the quarter.
 
Including one time items, net income of Protective Life came in at $1.27 per share, up 39.6% year over year.
 
Operational Highlights
 
Total revenue of Protective Life was $956.4 million, up 5.3% year over year. Results comfortably surpassed the Zacks Consensus Estimate of $921 million.
 
Protective Life’s gross premium and policy fees in the first quarter improved 6.3% year over year to $756.3 million.
 
Net investment income of Protective Life came in at $466.2 million, up 2.2% year over year.
 
Segment Highlights
 
The Life Marketing segment reported before-tax operating income of $24.7 million, down 19% year over year. The decline came on the back of an increase in non-deferred expenses resulting from higher sales. Sales were $44.6 million, up 73% year over year.
 
Before tax, operating income of Acquisitions segment was $29.4 million, down 33% year over year. The decrease was due to unfavorable variance related to mortality, interest and other benefits.
 
The Annuities segment reported before tax operating income of $36.4 million, up 27% year over year. The increase was driven by higher contribution from variable annuity business, partly offset by lower contribution from fixed annuity business. Annuities sale increased 3% year over year to 857.0 million. 
 
The Stable Value segment reported before tax operating income of $22.5 million, up by a significant 41% year over year. The segment reported sales of $205.3 million, compared with $26.5 million in the year-ago quarter.
 
The Asset Protection segment reported before-tax operating income of $7.4 million, up 14% year over year. The increase came from increase in guaranteed asset protection earnings. Sales increased 6% year over year to $126.5 million. 
 
Corporate & Other segment pre-tax operating loss was $2.5 million compared to an operating loss of $25.4 million in the year-ago quarter.
 
Share Repurchase Update
 
During the reported quarter, Protective Life did not make any repurchases and has shares worth $170 million remaining under its authorization. Additionally, Protective Life stated that it might not undertake any repurchases in 2013 anticipating the close of the acquisition of MONY Life Insurance Company and reinsurance of a portion of the MONY Life Insurance Company of America.
 
Protective Life carries a Zacks Rank #3 (Hold). Other players American Financial Group Inc. (AFG - Analyst Report), StanCorp Financial Group Inc.  (SFG - Analyst Report) and Torchmark Corp. (TMK - Analyst Report) have reported second quarter earnings ahead of the Zacks Consensus Estimates.  

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