It has been about a month since the last earnings report for Athene Holding . Shares have added about 11.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Athene Holding due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Athene's Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Athene's fourth-quarter 2020 adjusted operating income of $2.85 per share outpaced the Zacks Consensus Estimate by 31.9%. Moreover, the bottom line improved 29.5% year over year.
The company’s results benefited from higher net investment income, increased gross organic inflows and higher premiums.
Full-Year Highlights
For 2020, Athene Holding delivered net operating income of $6.42 per share, which beat the Zacks Consensus Estimate by 12.6%. However, the bottom line decreased 7.9% year over year.
Total revenues of $11.4 billion declined 0.9% year over year.
Behind the Headlines
Operating revenues were $6.1 billion which increased nearly three-fold year over year due to higher premiums, net investment income and product charges.
Premiums were $4.3 billion which increased nearly five-fold year over year.
Net investment income was $1.6 billion in the quarter under review, up 28.4% year over year.
Net invested assets of $150.2 billion as on Dec 31, 2020 improved 27.8% year over year.
Gross organic inflows totaled $9.3 billion in the quarter under review, increased nearly two-fold year over year, primarily attributable to continued strength across Athene's diversified funding channels including retail, flow reinsurance, pension risk transfer, and funding agreements.
Total benefits and expenses of $7.2 billion increased nearly three-fold year over year in the quarter under review. The increase was primarily due to higher future policy and other policy benefits, amortization of DAC and VOBA, policy and other operating expenses, interest sensitive contract benefits and dividends to policyholders.
Quarterly Segmental Update
Retirement Services reported adjusted operating income of $493 million, up 22% year over year, primarily driven by strong growth in average net invested assets as well as elevated net investment income from alternatives.
Corporate and Other generated adjusted operating income of $65 million against the prior-year quarter’s operating loss of $15 million. The increase in adjusted operating income was driven by an increase in the fair value of Athene's AOG investment, partially offset by additional preferred stock dividends and interest expense, as well as lower net investment income from alternatives.
Financial Update
The company exited the fourth quarter with cash and cash equivalents of $4.2 billion, which declined 44.9% from the prior quarter. Total debt of $1.9 billion at the end of the quarter inched up 34.7% from the figure at 2019-end. Adjusted debt to capital ratio of 12.7 deteriorated 60 basis points (bps) year over year.
Adjusted book value per share was $56.95 as of Dec 31, 2020, up 5.4% year over year.
Athene exited the fourth quarter with excess equity capital of $3.5 billion and total deployable capital of $7.7 billion. Adjusted operating ROE of 20.5% expanded 380 bps year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 30.85% due to these changes.
VGM Scores
At this time, Athene Holding has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Athene Holding has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Athene Holding (ATH) Up 11.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Athene Holding . Shares have added about 11.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Athene Holding due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Athene's Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Athene's fourth-quarter 2020 adjusted operating income of $2.85 per share outpaced the Zacks Consensus Estimate by 31.9%. Moreover, the bottom line improved 29.5% year over year.
The company’s results benefited from higher net investment income, increased gross organic inflows and higher premiums.
Full-Year Highlights
For 2020, Athene Holding delivered net operating income of $6.42 per share, which beat the Zacks Consensus Estimate by 12.6%. However, the bottom line decreased 7.9% year over year.
Total revenues of $11.4 billion declined 0.9% year over year.
Behind the Headlines
Operating revenues were $6.1 billion which increased nearly three-fold year over year due to higher premiums, net investment income and product charges.
Premiums were $4.3 billion which increased nearly five-fold year over year.
Net investment income was $1.6 billion in the quarter under review, up 28.4% year over year.
Net invested assets of $150.2 billion as on Dec 31, 2020 improved 27.8% year over year.
Gross organic inflows totaled $9.3 billion in the quarter under review, increased nearly two-fold year over year, primarily attributable to continued strength across Athene's diversified funding channels including retail, flow reinsurance, pension risk transfer, and funding agreements.
Total benefits and expenses of $7.2 billion increased nearly three-fold year over year in the quarter under review. The increase was primarily due to higher future policy and other policy benefits, amortization of DAC and VOBA, policy and other operating expenses, interest sensitive contract benefits and dividends to policyholders.
Quarterly Segmental Update
Retirement Services reported adjusted operating income of $493 million, up 22% year over year, primarily driven by strong growth in average net invested assets as well as elevated net investment income from alternatives.
Corporate and Other generated adjusted operating income of $65 million against the prior-year quarter’s operating loss of $15 million. The increase in adjusted operating income was driven by an increase in the fair value of Athene's AOG investment, partially offset by additional preferred stock dividends and interest expense, as well as lower net investment income from alternatives.
Financial Update
The company exited the fourth quarter with cash and cash equivalents of $4.2 billion, which declined 44.9% from the prior quarter. Total debt of $1.9 billion at the end of the quarter inched up 34.7% from the figure at 2019-end. Adjusted debt to capital ratio of 12.7 deteriorated 60 basis points (bps) year over year.
Adjusted book value per share was $56.95 as of Dec 31, 2020, up 5.4% year over year.
Athene exited the fourth quarter with excess equity capital of $3.5 billion and total deployable capital of $7.7 billion. Adjusted operating ROE of 20.5% expanded 380 bps year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 30.85% due to these changes.
VGM Scores
At this time, Athene Holding has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Athene Holding has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.