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Lincoln National (LNC) Earnings Beat in Q1, Revenues Miss
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Lincoln National Corporation’s (LNC - Free Report) first-quarter 2017 operating net income of $1.92 per share surpassed the Zacks Consensus Estimate by 18.5%. Also, the bottom line increased 52% year over year on the back of higher revenues.
Lincoln National’s operating revenues grew 7.9% year over year to $3.5 billion. The top line, however, lagged the Zacks Consensus Estimate of $3.56 billion by 1.7%.
Total expenses of $3.03 billion increased 0.6% year over year, mainly due to higher commission and other expenses.
Lincoln National Corporation Price, Consensus and EPS Surprise
Operating income increased 29% year over year to $281 million. Gross annuity deposits declined 14% to $2 billion due to a decrease in variable annuity deposits. Variable annuity sales dropped 13.7% year over year due to the negative impact of various market factors. Variable annuity sales from products without living benefits increased 25.6% year over year. Fixed annuity sales of $562 million declined 15.9% year over year.
Retirement Plan Services
Operating income increased 19.4% year over year to $37 million driven by higher fee income and expense efficiency.
Total deposits grew 26% year over year to $2.3 billion due to strong first-year sales in both the small and mid-large markets.
Life Insurance
Operating income grew 73% to $130 million from the year-ago quarter due to favorable mortality results and a recovery in variable investment income. Life insurance in-force improved 5% year over year to $699 billion. Total Life insurance sales increased 30.2% year over year to $181 million.
Group Protection
Operating income grew 40% from the year-ago quarter to $7 million. The upside was driven by a decline in amortization expenses, partially offset by a slightly higher non-medical loss ratio. Sales in this segment decreased 3.4% to $57 million.
Financial Update
As of Mar 31, 2017, Lincoln National’s book value per share, excluding accumulated other comprehensive income, climbed 9.6% year over year to $58.37 per share.
Total capital returned to shareholders was $266 million in the first quarter. This included $200 million of share buyback.
Operating return on equity, excluding accumulated other comprehensive income, grew 370 bps year over year to 13.6%.
Share Repurchase and Dividend Update
During the quarter, the company repurchased $200 million worth shares. The company ended the quarter with long-term debt of $5.13 billion, down 9.2% year over year.
Among the other players in the same space, the bottom line at American International Group Inc. (AIG - Free Report) , Prudential Financial Inc. (PRU - Free Report) and Aflac Inc. (AFL - Free Report) beat first-quarter estimates by 22.5%, 5.68% and 3.09%, respectively.
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Lincoln National (LNC) Earnings Beat in Q1, Revenues Miss
Lincoln National Corporation’s (LNC - Free Report) first-quarter 2017 operating net income of $1.92 per share surpassed the Zacks Consensus Estimate by 18.5%. Also, the bottom line increased 52% year over year on the back of higher revenues.
Lincoln National’s operating revenues grew 7.9% year over year to $3.5 billion. The top line, however, lagged the Zacks Consensus Estimate of $3.56 billion by 1.7%.
Total expenses of $3.03 billion increased 0.6% year over year, mainly due to higher commission and other expenses.
Lincoln National Corporation Price, Consensus and EPS Surprise
Lincoln National Corporation Price, Consensus and EPS Surprise | Lincoln National Corporation Quote
Quarterly Segment Details
Annuities
Operating income increased 29% year over year to $281 million. Gross annuity deposits declined 14% to $2 billion due to a decrease in variable annuity deposits. Variable annuity sales dropped 13.7% year over year due to the negative impact of various market factors. Variable annuity sales from products without living benefits increased 25.6% year over year. Fixed annuity sales of $562 million declined 15.9% year over year.
Retirement Plan Services
Operating income increased 19.4% year over year to $37 million driven by higher fee income and expense efficiency.
Total deposits grew 26% year over year to $2.3 billion due to strong first-year sales in both the small and mid-large markets.
Life Insurance
Operating income grew 73% to $130 million from the year-ago quarter due to favorable mortality results and a recovery in variable investment income. Life insurance in-force improved 5% year over year to $699 billion. Total Life insurance sales increased 30.2% year over year to $181 million.
Group Protection
Operating income grew 40% from the year-ago quarter to $7 million. The upside was driven by a decline in amortization expenses, partially offset by a slightly higher non-medical loss ratio. Sales in this segment decreased 3.4% to $57 million.
Financial Update
As of Mar 31, 2017, Lincoln National’s book value per share, excluding accumulated other comprehensive income, climbed 9.6% year over year to $58.37 per share.
Total capital returned to shareholders was $266 million in the first quarter. This included $200 million of share buyback.
Operating return on equity, excluding accumulated other comprehensive income, grew 370 bps year over year to 13.6%.
Share Repurchase and Dividend Update
During the quarter, the company repurchased $200 million worth shares.
The company ended the quarter with long-term debt of $5.13 billion, down 9.2% year over year.
Zacks Rank & Peer Performance
Lincoln National carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Among the other players in the same space, the bottom line at American International Group Inc. (AIG - Free Report) , Prudential Financial Inc. (PRU - Free Report) and Aflac Inc. (AFL - Free Report) beat first-quarter estimates by 22.5%, 5.68% and 3.09%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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