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Can Unum Group (UNM) Deliver a Surprise in Q2 Earnings?

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Unum Group (UNM - Free Report) is set to report second-quarter 2016 results on Jul 27, after market close. Last quarter, the company posted a positive earnings surprise of 5.56%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Unum Group is likely to have witnessed improved premium driven by solid core segmental performance. Sales and persistency are expected to have remained favorable.

Sales at Unum U.S. may have improved with persistency remaining strong.

Operating income at Colonial Group is expected to have been driven by improving premium income and favorable risk results.

Continued share buybacks should boost the bottom line.

However, a low interest rate environment might weigh on investment income. Despite changes in business mix, premium rate increases, intensifying focus on new market sales and capitalization of strategic opportunities, Unum U.K. results are expected to remain soft.

With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, with an average beat of 1.93%.

UNUM GROUP Price and EPS Surprise

UNUM GROUP Price and EPS Surprise | UNUM GROUP Quote

Earnings Whispers

Our proven model does not conclusively show that Unum is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Unum has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 94 cents.

Zacks Rank: Unum holds a Zacks Rank #4 (Sell).

We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is set to report second-quarter earnings results on Aug 3.  

Cigna Corp. (CI - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is set to report second-quarter earnings results on Aug 4.

Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is expected to report second-quarter earnings results on Aug 4.

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