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Athene's (ATH) Q3 Earnings & Revenues Surpass Estimates

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Athene Holding Ltd.’s third-quarter 2020 adjusted operating income of $1.53 per share outpaced the Zacks Consensus Estimate by 34.2%. Moreover, the bottom line improved 14.2% year over year.

The company’s results benefited from higher net investment income from alternatives, improved gross organic deposits and reduced expenses.

Athene Holding Ltd. Price, Consensus and EPS Surprise

Athene Holding Ltd. Price, Consensus and EPS Surprise

Behind the Headlines   

Operating revenues of $1.5 billion beat the Zacks Consensus Estimate by 6.6%. Moreover, the top line increased 18.4% year over year due to higher net investment income and product charges. However, increase in revenues have been partly offset by reduced premiums.

Premiums of $112 million declined 95.8% year over year in the third quarter.

Net investment income was $1.2 billion in the quarter under review, up 10.9% year over year.

Net invested assets of $142.8 billion as on Sep 30, 2020 improved 17.9% year over year.

Gross organic deposits totaled $7.4 billion in the quarter under review, surging 31.3% year over year, primarily attributable to continued strength across the retail, flow reinsurance, and funding agreement channels.

Total benefits and expenses of $2.2 billion decreased 47.7% year over year in the quarter under review. The decrease was primarily due to lower future policy and other policy benefits, amortization of DAC and VOBA and dividends to policyholders.

Quarterly Segmental Update

Retirement Services reported adjusted operating income of $361 million, up 41% year over year, driven by higher net investment income from alternatives.

Corporate and Other generated adjusted operating loss of $59 million, wider than the prior-year quarter’s operating loss of $13 million. The loss was primarily due to depreciation in Athene's investment in the Apollo Operating Group (AOG), greater preferred stock dividends and higher interest expense, which was partially offset by higher net investment income from alternatives.

Financial Update

The company exited the third quarter with cash and cash equivalents of $7.5 billion, which improved 78% from the prior quarter. Total debt of $1.5 billion at the end of the quarter inched up 49.9% from the figure at 2019-end. Adjusted debt to capital ratio of 10.8 deteriorated 210 basis points (bps) year over year.

Adjusted book value per share was $53.61 as of Sep 30, 2020, up 6% year over year.

Athene exited the third quarter with excess capital of $3.2 billion and total deployable capital of $7.6 billion. Adjusted operating ROE of 11.7% expanded 110 bps year over year.

Share Repurchase Activity

In the third quarter, Athene bought back 2.7 million shares for $97 million. It now has $224 million remaining under its current share buyback authorization.

Zacks Rank & Performance of Other Insurers

Athene currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Third-quarter earnings of CNA Financial (CNA - Free Report) , Assurant (AIZ - Free Report) , and Markel (MKL - Free Report) beat the respective Zacks Consensus Estimate.

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