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Lincoln National (LNC) to Post Q1 Results: What's in Store?

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Lincoln National Corporation (LNC - Free Report) is slated to report first-quarter 2021 results on May 5, after the market closes.

Q1 Estimates

The Zacks Consensus Estimate for the company’s first-quarter earnings per share is pegged at $1.48, indicating a decline of 33.9% from the prior-year reported figure. Nevertheless, the consensus mark for revenues stands at $4.8 billion, which suggests growth of 7.4% from the year-ago quarter.

Factors to Note

In the to-be-reported quarter, performance of the company’s Annuities segment is likely to have benefited from increased account values, backed by strong performance of equity markets. Continuous product developments with an intensified focus on growth and asset protection products keeping in mind the strong demand for guaranteed living benefits might have contributed to this segment’s performance. The Zacks Consensus Estimate for Annuities segment’s first-quarter revenues is pegged at $1.3 billion, indicating an improvement of 10.8% from the prior-year quarter.

Coming to its Retirement Plan Services segment, strong alternative investment performance, expense management initiatives and growing average account values are likely to have acted as tailwinds for the segment in the to-be-reported quarter. The consensus estimate for first-quarter segmental revenues stands at $331 million, which suggests growth of 11.4% from the year-ago quarter.

Its Life Insurance segment’s might have benefited from rise in average account values and average life insurance in-force. The Zacks Consensus Estimate for first-quarter segmental revenues is pegged at $2 billion, which indicates 9.9% growth from the prior-year quarter.

However, the company expects to witness elevated claims stemming from the COVID-19 pandemic, which might get reflected in revenues of Group Protection segment. Nevertheless, the segment is likely to have gained on the back of higher premiums and strong persistency rates. The consensus estimate for first-quarter revenues from this segment is pegged at $1.3 billion, suggesting 2.8% improvement from the prior-year reported figure.

However, Lincoln National expects loss ratio to remain elevated in the to-be-reported quarter due to pandemic-linked claims and higher disability loss ratio.

Several expense savings efforts might have contributed to the company’s margins in the to-be-reported quarter. Rampant implementation and widespread acceptance of digital tools are likely to have provided a boost to such efforts.

Earnings Surprise History

The company has an unimpressive earnings surprise history. Its bottom line missed estimates in three of the trailing four quarters and beat once, the average negative surprise being 43.61%. This is depicted in the chart below:

What Our Quantitative Model Predicts

The proven Zacks model does not conclusively predict an earnings beat for Lincoln National 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: Lincoln National has an Earnings ESP of -0.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Stocks to Consider

Here are some stocks worth considering from the insurance space with the perfect mix of elements to surpass estimates in their upcoming releases.

Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +9.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Manulife Financial Corporation (MFC - Free Report) ) has an Earnings ESP of +3.83% and a Zacks Rank #3, presently.

Voya Financial, Inc. (VOYA - Free Report) has an Earnings ESP of +1.77% and a Zacks Rank #3 at present.

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