Protective Life Corp. reported first-quarter 2013 net operating earnings of 89 cents per share, falling short of the Zacks Consensus Estimate of 93 cents. Earnings also declined 24.6% year over year.
The earnings beat came from higher contribution from Annuities, and Stable Value and Asset Protection segments.
Including realized investment gain – derivatives of 16 cents and realized investment loss – all other investments of 8 cents, net income of Protective Life came in at 97 cents per share, down 17.8% year over year.
Total revenue of Protective Life was $932.8 million, down 2% year over year. Results comfortably surpassed the Zacks Consensus Estimate of $914 million.
Protective Life’s gross premium and policy fees in the first quarter improved 4.4% year over year to $726.9 million.
Net investment income of Protective Life came in at $457.6 million, down 1% year over year.
Protective Life’s total benefits and expenses were $815.2 million, up 1.7% year over year.
The Life Marketing segment reported before-tax operating income of $23.7 million, down 22% year over year. The decline came on the back of an increase in non-deferred expenses resulting from higher sales, partially offset by higher investment income. Sales were $47.3 million, up from $22.6 million in the year-ago quarter.
Before tax, operating income of Acquisitions segment was $34.4 million, down 12% year over year. The decrease was primarily due to lower spread income.
The Annuities segment reported before tax operating income of $43.4 million, up 21% year over year. The increase was driven by higher contribution from fixed as well as variable annuity business.
The Stable Value segment reported before tax operating income of $17.4 million, up by a significant 41% year over year. The segment reported sales of $112 million, compared with $176 million in the year-ago quarter.
The Asset Protection segment reported before-tax operating income of $6.1 million, up 33% year over year. The increase largely reflects the $2.0 million legal settlement accrual included in the year-ago quarter. However, it was somewhat offset by $0.7 million lower guaranteed asset protection earnings, attributable to lower volume and higher loss ratios as well as a $0.3 million decline in service contract earnings attributable to lower investment income.
Corporate & Other segment pre-tax operating loss was $18.3 million compared to an operating profit of $27.9 million in the year-ago quarter.
Share Repurchase Update
During the reported quarter, Protective Life did not make any repurchases and has shares worth $170 million remaining under its authorization. Additionally, Protective Life stated that it might not undertake any repurchases in 2013 anticipating the close of the acquisition of MONY Life Insurance Company and reinsurance of a portion of the MONY Life Insurance Company of America.
Performance of Other Life Insurers
StanCorp Financial Group (SFG - Analyst Report) reported first-quarter 2013 net operating earnings of $1.07 per share, which exceeded the Zacks Consensus Estimate by 33.8%. Results were also 35.4% higher than 79 cents earned in the prior-year quarter.
Lincoln National Corporation (LNC - Analyst Report) reported first -quarter 2013 net operating earnings of $1.02 per share, lagging the Zacks Consensus Estimate of $1.10, although it breezed past the prior-year quarter’s earnings of 99 cents a share, primarily on lower share count.
Genworth Financial Inc. (GNW - Analyst Report) reported first-quarter 2013 net operating income of 30 cents per share. The result surpassed the Zacks Consensus Estimate of 27 cents and was much above the year-ago level of 3 cents.
Protective Life carries a Zacks Rank #1 (Strong Buy).