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Lincoln National's (LNC) Q3 Earnings Surpass, Increase Y/Y
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Lincoln National Corporation’s (LNC - Free Report) third-quarter 2018 earnings of $2.34 per share beat the Zacks Consensus Estimate by 7.8%. Moreover, the bottom line improved about 15.3% year over year, mainly led by double-digit earnings growth across all business lines as well as strategic investments such as Liberty acquisition. Earnings were also supported by the company’s operational efficiency and its disciplined capital management.
Lincoln National Corporation Price, Consensus and EPS Surprise
Operating revenues of $4.3 billion increased 21% year over year but missed the Zacks Consensus Estimate by 0.6%.
Strong Segment Results
Operating income in the Annuities segment rose 9% year over year to $302 million. This was mainly driven by higher fee income generated from account value growth as well as lower reported tax rate.
Total annuity deposits soared 61% from the year-ago quarter to $3.1 billion, driven by growth in variable and fixed annuities owing to product and distribution expansion.
Operating income in Retirement Plan Services increased 14% year over year to $40 million, banking on growth in fee income, lower costs and a slashed tax rate. Total deposits surged 74% from the prior-year quarter’s value to $3,3 billion owing to better first-year sales, growth in targets markets and recurring deposits.
Operating income in Life Insurance segment was up 45% year over year to $176 million as a result of favorable mortality, increasing revenues and a lower reported tax rate.
Operating revenues from this segment increased 9% year over year to $1.8 billion.
Operating income in Group Protection plunged 53.6% from the year-ago quarter’s figure to $63 million. This downside was driven by the buyout of the Liberty Mutual Group benefits business. Operating revenues skyrocketed 73.2% year over year to $937 million.
The Other operations segment incurred a loss of $71 million, wider than $20 million suffered in the prior-year quarter, mainly due to tax items, funding acquisitions and a strategic increase in digitalization costs.
Financial Update
As of Sep 30, 2018, Lincoln National’s book value per share excluding accumulated other comprehensive income, climbed 8% year over year to $66.27.
Operating return on equity (ROE) excluding accumulated other comprehensive income and goodwill, improved 10 bps from the year-ago quarter’s number to 16.5%.
The company ended the quarter with long-term debt of $5.8 billion, up 8.4% year over year.
Among other players from the insurance industry having reported third-quarter earnings so far, the bottom line of The Progressive Corp. (PGR - Free Report) and MGIC Investment Corp. (MTG - Free Report) outpaced the respective Zacks Consensus Estimate while the metric of RLI Corp. (RLI - Free Report) missed the same.
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Lincoln National's (LNC) Q3 Earnings Surpass, Increase Y/Y
Lincoln National Corporation’s (LNC - Free Report) third-quarter 2018 earnings of $2.34 per share beat the Zacks Consensus Estimate by 7.8%. Moreover, the bottom line improved about 15.3% year over year, mainly led by double-digit earnings growth across all business lines as well as strategic investments such as Liberty acquisition. Earnings were also supported by the company’s operational efficiency and its disciplined capital management.
Lincoln National Corporation Price, Consensus and EPS Surprise
Lincoln National Corporation Price, Consensus and EPS Surprise | Lincoln National Corporation Quote
Operating revenues of $4.3 billion increased 21% year over year but missed the Zacks Consensus Estimate by 0.6%.
Strong Segment Results
Operating income in the Annuities segment rose 9% year over year to $302 million. This was mainly driven by higher fee income generated from account value growth as well as lower reported tax rate.
Total annuity deposits soared 61% from the year-ago quarter to $3.1 billion, driven by growth in variable and fixed annuities owing to product and distribution expansion.
Operating income in Retirement Plan Services increased 14% year over year to $40 million, banking on growth in fee income, lower costs and a slashed tax rate. Total deposits surged 74% from the prior-year quarter’s value to $3,3 billion owing to better first-year sales, growth in targets markets and recurring deposits.
Operating income in Life Insurance segment was up 45% year over year to $176 million as a result of favorable mortality, increasing revenues and a lower reported tax rate.
Operating revenues from this segment increased 9% year over year to $1.8 billion.
Operating income in Group Protection plunged 53.6% from the year-ago quarter’s figure to $63 million. This downside was driven by the buyout of the Liberty Mutual Group benefits business. Operating revenues skyrocketed 73.2% year over year to $937 million.
The Other operations segment incurred a loss of $71 million, wider than $20 million suffered in the prior-year quarter, mainly due to tax items, funding acquisitions and a strategic increase in digitalization costs.
Financial Update
As of Sep 30, 2018, Lincoln National’s book value per share excluding accumulated other comprehensive income, climbed 8% year over year to $66.27.
Operating return on equity (ROE) excluding accumulated other comprehensive income and goodwill, improved 10 bps from the year-ago quarter’s number to 16.5%.
The company ended the quarter with long-term debt of $5.8 billion, up 8.4% year over year.
Zacks Rank and Peer Releases
Lincoln National carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the insurance industry having reported third-quarter earnings so far, the bottom line of The Progressive Corp. (PGR - Free Report) and MGIC Investment Corp. (MTG - Free Report) outpaced the respective Zacks Consensus Estimate while the metric of RLI Corp. (RLI - Free Report) missed the same.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6% and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>