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Unum (UNM) Gears up for Q2 Earnings: What's in the Cards?

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Unum Group (UNM - Free Report) is slated to report second-quarter 2020 results on Jul 28, after the closing bell. The company has a trailing four-quarter earnings surprise of 0.19%, on average.

Factors to Note

Lower premium income and weak investment income are likely to get reflected in Unum’s second-quarter results. The Zacks Consensus Estimate for second-quarter premium income is pegged at $2.3 billion, suggesting a decline of 0.8% from the prior-year quarter. The company expects growth in premium income to be adversely affected by the market volatility induced by the COVID-19 pandemic.

The consensus estimate for net investment income stands at $554 million, indicating a decrease of 11.4% from the year-ago reported figure. Lower interest rates are likely to have impacted the company’s net investment income in the to-be-reported quarter. The Zacks Consensus Estimate for second-quarter revenues is pegged at $3 billion, suggesting a decline of 2.3% from the prior-year quarter.

The Unum U.S. segment might have witnessed lower premium growth in the second quarter. The sales environment, which has been under pressure due to the pandemic, is likely to have weighed on the to-be-reported quarter’s performance. The Zacks Consensus Estimate for second-quarter premium income at the Unum U.S. segment is pegged at $1.5 billion, suggesting a decline of 0.7% from the prior-year quarter.

Nevertheless, the Colonial Life segment may have benefited from improved premium income and favorable risk results in the to-be-reported quarter. The Zacks Consensus Estimate for second-quarter premium income at the Colonial Life segment is pegged at $424 million, indicating an improvement of 0.7% from the prior-year quarter.

However, higher claims in group critical illness and soft results in group disability are likely to have affected the Unum International segment’s performance in the to-be-reported quarter. The Zacks Consensus Estimate for the second-quarter premium income at the Unum International segment is pegged at $158 million, suggesting a fall of 0.6% from the year-ago reported figure.

Increased expenses related to interest expenses, amortization of deferred acquisition costs and other expenses might have impacted the second-quarter performance.

The Zacks Consensus Estimate for earnings per share is pegged at $1.19, indicating a decline of 12.5% from the year-ago reported figure.

Unum Group Price and EPS Surprise

Unum Group Price and EPS Surprise

Unum Group price-eps-surprise | Unum Group Quote

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Unum this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Unum has an Earnings ESP of -0.87%. This is because the Most Accurate Estimate of $1.18 is pegged lower than the Zacks Consensus Estimate of $1.19. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Unum carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Some stocks worth considering from the insurance space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

MetLife, Inc. (MET - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #3.

Prudential Financial, Inc. (PRU - Free Report) has an Earnings ESP of +0.73% and a Zacks Rank of 3, at present.

Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +1.22% and a Zacks Rank #3.

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