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Lincoln National (LNC) Beats on Q1 Earnings, Lags Revenues
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Lincoln National Corporation’s (LNC - Free Report) first-quarter 2019 earnings of $2.14 per share beat the Zacks Consensus Estimate by 2.9%. Moreover, the bottom line improved about 8.6% year over year, mainly led by increase in revenues and share buyback.
Operating revenues of $4 billion increased 9.9% year over year but missed the Zacks Consensus Estimate by 8.5%.
Total expenses rose 16.5% year over year to $3.7 billion, due to higher benefits and commission and other expenses.
Lincoln National Corporation Price, Consensus and EPS Surprise
Operating income in the Annuities segment was down 6.4% year over year to $250 million. This was mainly due to decline in lower account from Athene reinsurance transaction, completed in the fourth quarter of 2018.
Total annuity deposits soared 39% from the year-ago quarter to $3.5 billion, driven by growth in fixed annuities sales, partly offset by 5% decline in variable annuity sales.
Operating income in Retirement Plan Services decreased 9.3% year over year to $39 million, primarily due to lower variable investment income and spread income, which more than offset an increase in account values. Total deposits increased 6% year over year to $2.5 billion.
Operating income in Life Insurance segment was up 9% year over year to $157 million, as a result of favorable mortality and lower amortization expense, partially offset by a decrease in alternative investment income.
Operating income in Group Protection increased 90% year over year to $55 million. This increase was driven by the buyout of the Liberty Mutual Group benefits business.
The Other operations segment incurred a loss of $60 million, wider than $42 million suffered in the prior-year quarter.
Financial Update
As of Mar 31, 2019, Lincoln National’s book value per share, excluding accumulated other comprehensive income, climbed 9% year over year to $68.79.
Operating return on equity (ROE), excluding accumulated other comprehensive income and goodwill, was up just 10 bps year over year to 14.5%.
The company’s long term debt declined 1.6% year over year to $4.7 billion. Average shareholders’ equity (excluding AOCI and goodwill) of $12.2 billion declined 0.5% year over year.
Among the other players from the insurance industry that have reported first-quarter earnings so far, the bottom line of Torchmark Corporation , RLI Corporation (RLI - Free Report) and W.R. Berkley Corp. (WRB - Free Report) beat the respective Zacks Consensus Estimate by 3.14%, 20.3% and 54%.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Lincoln National (LNC) Beats on Q1 Earnings, Lags Revenues
Lincoln National Corporation’s (LNC - Free Report) first-quarter 2019 earnings of $2.14 per share beat the Zacks Consensus Estimate by 2.9%. Moreover, the bottom line improved about 8.6% year over year, mainly led by increase in revenues and share buyback.
Operating revenues of $4 billion increased 9.9% year over year but missed the Zacks Consensus Estimate by 8.5%.
Total expenses rose 16.5% year over year to $3.7 billion, due to higher benefits and commission and other expenses.
Lincoln National Corporation Price, Consensus and EPS Surprise
Lincoln National Corporation Price, Consensus and EPS Surprise | Lincoln National Corporation Quote
Strong Segment Results
Operating income in the Annuities segment was down 6.4% year over year to $250 million. This was mainly due to decline in lower account from Athene reinsurance transaction, completed in the fourth quarter of 2018.
Total annuity deposits soared 39% from the year-ago quarter to $3.5 billion, driven by growth in fixed annuities sales, partly offset by 5% decline in variable annuity sales.
Operating income in Retirement Plan Services decreased 9.3% year over year to $39 million, primarily due to lower variable investment income and spread income, which more than offset an increase in account values. Total deposits increased 6% year over year to $2.5 billion.
Operating income in Life Insurance segment was up 9% year over year to $157 million, as a result of favorable mortality and lower amortization expense, partially offset by a decrease in alternative investment income.
Operating income in Group Protection increased 90% year over year to $55 million. This increase was driven by the buyout of the Liberty Mutual Group benefits business.
The Other operations segment incurred a loss of $60 million, wider than $42 million suffered in the prior-year quarter.
Financial Update
As of Mar 31, 2019, Lincoln National’s book value per share, excluding accumulated other comprehensive income, climbed 9% year over year to $68.79.
Operating return on equity (ROE), excluding accumulated other comprehensive income and goodwill, was up just 10 bps year over year to 14.5%.
The company’s long term debt declined 1.6% year over year to $4.7 billion.
Average shareholders’ equity (excluding AOCI and goodwill) of $12.2 billion declined 0.5% year over year.
Zacks Rank and Peer Releases
Lincoln National has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among the other players from the insurance industry that have reported first-quarter earnings so far, the bottom line of Torchmark Corporation , RLI Corporation (RLI - Free Report) and W.R. Berkley Corp. (WRB - Free Report) beat the respective Zacks Consensus Estimate by 3.14%, 20.3% and 54%.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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