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Primerica's (PRI) Q4 Earnings Lag, Revenues Top Estimates

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Primerica, Inc. (PRI - Free Report) delivered fourth-quarter 2021 operating income of $2.94 per share, which missed the Zacks Consensus Estimate by 7.6%. The bottom line improved 20%, reflecting better performance at term life insurance and investment businesses.

Primerica, Inc. Price, Consensus and EPS Surprise

Operational Update

Operating revenues grew 21.5% year over year to $723 million on higher contributions from Investment and Savings Products, and Term Life Insurance segments. Revenues beat the Zacks Consensus Estimate by 1.5%.

Term Life Insurance revenues increased 11% to $408.7 million year over year, driven by 13% growth in adjusted direct premiums.

Investment and Savings Products revenues rose 28% to $247.1 million. Corporate and Other Distributed Products revenues declined 8% to $29.7 million. Senior Health generated $37.5 million in revenues in the reported quarter.

Life Insurance policies issued in the quarter declined 14%. Investment and Savings Products sales jumped 46% to $3 billion in the fourth quarter.

Total benefits and expenses of $657.8 million were up 41% year over year.

Adjusted operating income before taxes increased 18% year over year as Term Life Insurance operating income rose 14% with COVID continuing to impact the segment’s results favorably in adjusted direct premium growth. Investment and Savings Products income improved 25%, driven by strong product sales and growth in average client asset values.

Financial Update

Cash and cash equivalents was $392.5 million as of Dec 31, 2021, down 28.3% from the level on Dec 31, 2020.

Total investments were $4.3 billion, up 9.5% from the figure as of Dec 31, 2020.

Debts were $607.1 million, up 62.1% from the 2020-end level.

Stockholders’ equity totaled $2.1 billion, up 13.4% from the level on Dec 31, 2020.

Primerica Life Insurance Company’s statutory risk-based capital ratio was about 440% as of Dec 31, 2021.

Capital Deployment Update

On Feb 8, the board of directors approved a 17% hike in dividends to 55 cents per share. The dividend will be paid out on Mar 14, 2022, to stockholders of record as of Feb 22, 2022.

The board of directors approved an increase of $50 million to the previously announced $275 million share repurchase program.

Zacks Rank

Primerica currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Of the life insurance industry players that have reported fourth-quarter results so far, Voya Financial, Inc (VOYA - Free Report) beat the Zacks Consensus Estimate for earnings while Lincoln National Corporation (LNC - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) missed expectations.

Voya Financial reported fourth-quarter 2021 adjusted operating earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate by 28.4%. The bottom line remained flat year over year. Total revenues amounted to $1.7 billion, which declined 19.2% year over year in the fourth quarter.

As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $739 billion.

Lincoln National’s fourth-quarter 2021 adjusted earnings of $1.56 per share missed the Zacks Consensus Estimate of $1.98 and declined from the prior-year figure of $1.78 per share. Adjusted operating revenues increased 2.4% year over year to $4.8 billion and beat the consensus mark of $4.7 billion.

Even though the ongoing pandemic is likely to continue hurting results, Lincoln National is expected to witness rising earnings per share on the back of its Spark Initiative.

Reinsurance Group reported fourth-quarter 2021 adjusted operating loss of 56 cents per share against the Zacks Consensus Estimate of earnings of 83 cents per share. RGA had reported an operating income of $1.19 per share in the prior-year quarter. Higher COVID-19 mortality claims weighed on the performance. Operating revenues of $4.3 billion increased 5.8% year over year. The top line beat the Zacks Consensus Estimate by 2.1%.

RGA’s net premiums of $3.4 billion rose 4.5% year over year. Investment income increased 18%, reflecting a 5% higher average asset balance and strong variable investment income. Average investment yield increased 50 bps to 4.7%, primarily due to higher variable investment income.

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