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Lincoln National (LNC) Incurs Q3 Loss, Beats on Revenues

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Lincoln National Corporation (LNC - Free Report) incurred third-quarter 2020 loss of 72 cents per share. The Zacks Consensus Estimate was of earnings of $2.16 per share. Further, the bottom line tumbled from the year-ago quarter’s earnings of $2.22.

Third-quarter results were impacted by an elevated claims experience from COVID-19.

Adjusted operating revenues of $4.8 billion, however, increased 3.2% year over year. The top line also beat the consensus mark by 1% on the back of the company’s Retirement Plan Services segment.

Total expenses inched up 0.3% year over year to $4.9 billion, primarily due to higher interest and commissions, and other expenses.

Net investment income increased 18.1% year over year to $1.45 billion.

Segmental Performance

Operating income in the Annuities segment was up 16% year over year to $196 million. Revenues of $1.04 billion inched up 0.8% year over year.

Total annuity deposits plunged 27% to $2.5 billion from the year-ago quarter.

Operating income in Retirement Plan Services rose 14% year over year to $50 million owing to favorable returns within its alternative investment portfolio and a disciplined expense management.

Revenues of $311 million climbed 4.4% year over year.

Total deposits improved 6% year over year to $2.4 billion owing to growth in recurring deposits and strong first-year sales.

Life Insurance segment reported an operating loss of $311 million, wider than the operating loss of $245 million in the year-ago quarter. Moreover, operating revenues in this segment increased 1.4% year over year to $2.1 billion.

Operating income in Group Protection slumped 90.2% year over year to $6 million.  Operating revenues were up 4.4% year over year to $1.1 billion, courtesy of higher sales.

Share Repurchase Update

Lincoln National’s management hiked its quarterly dividend to 42 cents per share, reflecting a 5% increase from the last dividend. The meatier dividend is payable Feb 1, 2021 to its shareholders of record on Jan 11, 2021.

The company didn’t repurchase shares in the quarter under review.

Financial Update (as of Sep 30, 2020)

Lincoln National’s book value per share excluding accumulated other comprehensive income inched up 3% year over year to $71.10.

Adjusted operating return on equity (ROE) excluding accumulated other comprehensive income and goodwill stands at -3.9% compared with the year-ago quarter’s figure of -1.3%.

The company ended the quarter with long-term debt of $6.7 billion, up 10.6% year over year.

As of Sep 30, 2020, the company had assets worth $347.8 billion, up 6.9% from the year-ago quarter’s number. Shareholders’ equity increased 7.8% year over year to $21.5 billion.

Zacks Rank and Performance of Other Players

Lincoln National carries a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players in the insurance space that already reported third-quarter earnings, the bottom-line results of The Progressive Corp. (PGR - Free Report) beat the respective Zacks Consensus Estimate while that of Principal Financial Group (PFG - Free Report) and Chubb Ltd. (CB - Free Report) missed the same.

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