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Life Insurers Q2 Earnings to Watch on Aug 3: AEL, LNC, VOYA
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The second-quarter earnings season is in top gear with results from 63% of the S&P 500 members already on board as per the Earnings Preview report. The 317 index members that have reported have seen total earnings decline of 3.3% on 0.9% lower revenues. However, the beat ratio is 72.9% for the bottom line and 53.6% for the top line.
Within the Finance sector, earnings results from about 80% players so far point to an earnings decline of 4.2% though revenues managed a 1.1% improvement. The beat ratio also compares unfavorably with the S&P 500 index.
The life insurance industry is part of the broader Finance sector. Like other insurers, life insurers too continue to bear the pain of a low interest rate environment. After the last hike in Dec 2015, the Fed stayed away from increasing the same in its following FOMCs, citing market uncertainties. This in turn will keep investment results under pressure. Nonetheless, the slight rate rise is a breather for life insurers which suffered spread compression on products like fixed annuities and universal life due to sustained low rates.
Also, to cope with this low rate era, life insurers have lowered their interest-sensitive product lines.
Life insurers have braced their portfolio by redesigning and re-pricing of products that have likely helped in writing higher premiums. Also, prudent cost management should boost profitability.
As many as 1090 companies are due to report their quarterly results this week, including 116 S&P 500 members. Let’s find out what’s in store for three life insurance companies that will report second-quarter results on Aug 3.
Lincoln National Corp. (LNC - Free Report) is a diversified life insurance and investment management company. It engages in multiple insurance and retirement businesses in the U.S. Last quarter, the company delivered a 15.54% negative surprise. Lincoln National has an Earnings ESP of +1.29% as the Most Accurate estimate is pegged at $1.59 and the Zacks Consensus Estimate stands lower a $1.56. However, the company carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP.
Lincoln National likely digested low investment income and income from alternative investments, and weak Annuity sales. However, an increase in sales of products without long-term guarantees, higher sales in the Life segment and improved results at Group Protection should drive the reported quarter’s earnings. (Read: Will Lincoln National Disappoint Again in Q2 Earnings?)
With respect to the surprise trend, Lincoln National missed expectations in each of the last four quarters, with an average negative surprise of 12.09%.
American Equity Investment Life Holding Company (AEL - Free Report) through its wholly owned operating subsidiaries, issues fixed annuity and life insurance products, with primary emphasis on the sale of fixed index and fixed rate annuities. The company delivered a 58.33% negative surprise last quarter. For the second quarter, American Equity has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 60 cents. It currently carries a Zacks Rank #4.
With respect to the surprise history, American Equity missed expectations in three of the last four quarters, with an average miss of 15.39%.
Voya Financial, Inc. (VOYA - Free Report) helps Americans plan, invest and protect their savings. The company delivered a 22.54% negative surprise last quarter. For the second quarter, Voya Financial has an Earnings ESP of -2.53% as the Most Accurate estimate stands at 7 cents and the Zacks Consensus Estimate is pegged higher at 79 cents. It currently carries a Zacks Rank #4.
With respect to the surprise history, Voya Financial missed expectations in three of the last four quarters, with an average miss of 15.33%.
Keep an eye on our full earnings articles to see how these companies finally fared.
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Life Insurers Q2 Earnings to Watch on Aug 3: AEL, LNC, VOYA
The second-quarter earnings season is in top gear with results from 63% of the S&P 500 members already on board as per the Earnings Preview report. The 317 index members that have reported have seen total earnings decline of 3.3% on 0.9% lower revenues. However, the beat ratio is 72.9% for the bottom line and 53.6% for the top line.
Within the Finance sector, earnings results from about 80% players so far point to an earnings decline of 4.2% though revenues managed a 1.1% improvement. The beat ratio also compares unfavorably with the S&P 500 index.
The life insurance industry is part of the broader Finance sector. Like other insurers, life insurers too continue to bear the pain of a low interest rate environment. After the last hike in Dec 2015, the Fed stayed away from increasing the same in its following FOMCs, citing market uncertainties. This in turn will keep investment results under pressure. Nonetheless, the slight rate rise is a breather for life insurers which suffered spread compression on products like fixed annuities and universal life due to sustained low rates.
Also, to cope with this low rate era, life insurers have lowered their interest-sensitive product lines.
Life insurers have braced their portfolio by redesigning and re-pricing of products that have likely helped in writing higher premiums. Also, prudent cost management should boost profitability.
INSURANCE-LIFE Industry Price Index
INSURANCE-LIFE Industry Price Index
As many as 1090 companies are due to report their quarterly results this week, including 116 S&P 500 members. Let’s find out what’s in store for three life insurance companies that will report second-quarter results on Aug 3.
Lincoln National Corp. (LNC - Free Report) is a diversified life insurance and investment management company. It engages in multiple insurance and retirement businesses in the U.S. Last quarter, the company delivered a 15.54% negative surprise. Lincoln National has an Earnings ESP of +1.29% as the Most Accurate estimate is pegged at $1.59 and the Zacks Consensus Estimate stands lower a $1.56. However, the company carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP.
Lincoln National likely digested low investment income and income from alternative investments, and weak Annuity sales. However, an increase in sales of products without long-term guarantees, higher sales in the Life segment and improved results at Group Protection should drive the reported quarter’s earnings. (Read: Will Lincoln National Disappoint Again in Q2 Earnings?)
With respect to the surprise trend, Lincoln National missed expectations in each of the last four quarters, with an average negative surprise of 12.09%.
LINCOLN NATL-IN Price and EPS Surprise
LINCOLN NATL-IN Price and EPS Surprise | LINCOLN NATL-IN Quote
American Equity Investment Life Holding Company (AEL - Free Report) through its wholly owned operating subsidiaries, issues fixed annuity and life insurance products, with primary emphasis on the sale of fixed index and fixed rate annuities. The company delivered a 58.33% negative surprise last quarter. For the second quarter, American Equity has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 60 cents. It currently carries a Zacks Rank #4.
With respect to the surprise history, American Equity missed expectations in three of the last four quarters, with an average miss of 15.39%.
AMER EQUITY INV Price and EPS Surprise
AMER EQUITY INV Price and EPS Surprise | AMER EQUITY INV Quote
Voya Financial, Inc. (VOYA - Free Report) helps Americans plan, invest and protect their savings. The company delivered a 22.54% negative surprise last quarter. For the second quarter, Voya Financial has an Earnings ESP of -2.53% as the Most Accurate estimate stands at 7 cents and the Zacks Consensus Estimate is pegged higher at 79 cents. It currently carries a Zacks Rank #4.
With respect to the surprise history, Voya Financial missed expectations in three of the last four quarters, with an average miss of 15.33%.
VOYA FINANCIAL Price and EPS Surprise
VOYA FINANCIAL Price and EPS Surprise | VOYA FINANCIAL Quote
Keep an eye on our full earnings articles to see how these companies finally fared.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>