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Will Soft Unum U.K. Drag Unum Group's (UNM) Q3 Earnings?

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Unum Group (UNM - Free Report) is slated to report third-quarter 2017 results on Oct 25, after the market closes. The company delivered a positive earnings surprise in the last two quarters. Let’s see what it has in store for this yet-to-be reported quarter.

Unum Group is expected to have witnessed improved operating income at Unum U.S. and Colonial Life segments, driven by higher premiums and favorable risk results. Sales at both the segments likely have improved, thus fueling the company’s total premiums.

The company’s voluntary benefits business likely has performed better.

Continued share buybacks should have boosted the bottom line.

The Unum U.K. is expected to have remained soft at the backdrop of challenging economic environment.

The Zacks Consensus estimate for earnings is pegged at $1.04 on $2.8 billion revenues. While the bottom line reflects a 4.9% increase, the top line translates to a 2.3% increase, both on a year-over-year basis.

Earnings Whispers

Our proven model does not conclusively show that Unum Group 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. But that is not the case here as you will see below.

Zacks ESP: Unum Group has an Earnings ESP of -0.51%. This is because the Most Accurate estimate of $1.03 is pegged lower than the Zacks Consensus Estimate of $1.04. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Unum Group Price and EPS Surprise

Zacks Rank: Unum Group carries a Zacks Rank #2, which though increases the predictive power of ESP, a company needs to have a positive ESP to be confident about an earnings surprise. Hence, this combination leaves surprise prediction inconclusive.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement.

Stocks to Consider

Some stocks worth considering from the insurance industry with the right combination of elements to come up with an earnings beat this quarter are as follows:

CNO Financial Group, Inc. (CNO - Free Report) has an Earnings ESP of +1.70% and carries a Zacks Rank #3. The company is set to report third-quarter earnings on Oct 25.

Prudential Financial (PRU - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank of 2 as well. The company is slated to report third-quarter earnings on Nov 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lincoln National Corp. (LNC - Free Report) has an Earnings ESP of +0.05%. This Zacks #2 Ranked company is slated to report third-quarter earnings on Nov 1.

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