Torchmark Corporation is slated to report second-quarter 2017 results on Jul 26, after the market closes. Last quarter, the company delivered a positive earnings surprise of 0.88%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Torchmark is likely to report higher administrative expenses in the soon-to-be-reported quarter, mainly driven by higher pension costs due to the required implementation of a new mortality table and further investments in IT systems. For 2017, the company anticipates administrative expenses to increase 5% and be around 6.3% of premium.
The company has also likely experienced a rise in total benefits and expenses in the second quarter.
In addition, the company is likely to witness a lower insurance underwriting income in the second quarter, owing to higher administrative expenses.
However, the life insurer is likely to report bottom-line growth in the second quarter on the back of higher premiums from the Life and Health segments. Notably, the company projects a net operating income from continuing operations per share between $4.63 and $4.77 in 2017. The $4.70 per share midpoint reflects an increase of 3 cents from the midpoint of the life insurer’s previous guidance.
Further, the company has likely displayed a higher excess investment income in the soon-to-be-reported quarter.
With respect to the surprise trend, the company delivered positive surprises in the trailing four quarters with an average beat of 2.01%.
Earnings Whispers
Our proven model does not conclusively show that Torchmark 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. That is not the case here as you will see below.
Zacks ESP: Torchmark has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.17. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Torchmark carries a Zacks Rank #4 (Sell).
Please note that we caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some better-ranked companies from the insurance industry with the right combination of elements to come up with an earnings beat this quarter are as follows:
CNA Financial Corporation (CNA - Free Report) , which is set to report second-quarter earnings on Jul 31, has an Earnings ESP of +4.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +2.74% and a Zacks Rank #1. The company is set to report second-quarter earnings on Aug 9.
Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #1. The company is slated to report second-quarter earnings on Aug 9.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Torchmark Corporation is slated to report second-quarter 2017 results on Jul 26, after the market closes. Last quarter, the company delivered a positive earnings surprise of 0.88%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Torchmark is likely to report higher administrative expenses in the soon-to-be-reported quarter, mainly driven by higher pension costs due to the required implementation of a new mortality table and further investments in IT systems. For 2017, the company anticipates administrative expenses to increase 5% and be around 6.3% of premium.
The company has also likely experienced a rise in total benefits and expenses in the second quarter.
In addition, the company is likely to witness a lower insurance underwriting income in the second quarter, owing to higher administrative expenses.
However, the life insurer is likely to report bottom-line growth in the second quarter on the back of higher premiums from the Life and Health segments. Notably, the company projects a net operating income from continuing operations per share between $4.63 and $4.77 in 2017. The $4.70 per share midpoint reflects an increase of 3 cents from the midpoint of the life insurer’s previous guidance.
Further, the company has likely displayed a higher excess investment income in the soon-to-be-reported quarter.
With respect to the surprise trend, the company delivered positive surprises in the trailing four quarters with an average beat of 2.01%.
Earnings Whispers
Our proven model does not conclusively show that Torchmark 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. That is not the case here as you will see below.
Zacks ESP: Torchmark has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.17. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Torchmark carries a Zacks Rank #4 (Sell).
Please note that we caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some better-ranked companies from the insurance industry with the right combination of elements to come up with an earnings beat this quarter are as follows:
CNA Financial Corporation (CNA - Free Report) , which is set to report second-quarter earnings on Jul 31, has an Earnings ESP of +4.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +2.74% and a Zacks Rank #1. The company is set to report second-quarter earnings on Aug 9.
Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #1. The company is slated to report second-quarter earnings on Aug 9.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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