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American Equity (AEL) Q1 Earnings Miss, Revenues Beat Mark
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American Equity Investment Life Holding Company (AEL - Free Report) reported first-quarter 2021 adjusted net earnings of 43 cents per share, which missed the Zacks Consensus Estimate by 27.1%. The bottom line also decreased 74.2% on a year-over-year basis.
The company witnessed an increase in annuity sales, lower investment spread income and higher expenses during the quarter.
American Equity Investment Life Holding Company Price, Consensus and EPS Surprise
Operating total revenues were $497 million, down 13.3% year over year. The top line, however, beat the Zacks Consensus Estimate by 1.2%.
Premiums and other considerations increased 72.4% year over year to $13.2 million. Annuity product charges increased 0.8%, while net investment income declined 13.3% on a year-over-year basis.
Gross annuity sales of $2.4 billion increased more than three-fold year over year. Sequentially, annuity sales were driven by increased gross annuity sales at Eagle Life (up 19%) and American Equity Life (up 46%).
Total benefits and expenses were $601 million versus negative $594 million a year ago due to higher insurance policy benefits, changes in future policy benefits, and interest sensitive and index product benefits along with amortization of deferred sales inducements, policy acquisition costs, and other operating costs and expenses.
Investment spread was 2%, down from 2.64% in the year-ago quarter.
Policyholder funds under management of $55.8 billion at quarter-end were up 3.2% from 2020-end.
Financial Update
Cash and cash equivalents were $11.1 billion on Mar 31, 2021, which increased 21.9% from 2020-end. Total investments were about $52.4 billion, which decreased 2.2% from 2020-end.
Notes payable totaled $495.8 million, marginally up 0.02% from 2020-end. Book value per common share excluding AOCI was $39, up 8.4% from 2020-end.
Total debt/total capitalization was 11.6%, improving 60 basis points from 2020-end.
Operating return on equity excluding average AOCI was 8.54%.
First-quarter earnings of Assurant, Inc. (AIZ - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and Everest Re Group, Ltd. beat the respective Zacks Consensus Estimate.
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American Equity (AEL) Q1 Earnings Miss, Revenues Beat Mark
American Equity Investment Life Holding Company (AEL - Free Report) reported first-quarter 2021 adjusted net earnings of 43 cents per share, which missed the Zacks Consensus Estimate by 27.1%. The bottom line also decreased 74.2% on a year-over-year basis.
The company witnessed an increase in annuity sales, lower investment spread income and higher expenses during the quarter.
American Equity Investment Life Holding Company Price, Consensus and EPS Surprise
American Equity Investment Life Holding Company price-consensus-eps-surprise-chart | American Equity Investment Life Holding Company Quote
Operational Update
Operating total revenues were $497 million, down 13.3% year over year. The top line, however, beat the Zacks Consensus Estimate by 1.2%.
Premiums and other considerations increased 72.4% year over year to $13.2 million. Annuity product charges increased 0.8%, while net investment income declined 13.3% on a year-over-year basis.
Gross annuity sales of $2.4 billion increased more than three-fold year over year. Sequentially, annuity sales were driven by increased gross annuity sales at Eagle Life (up 19%) and American Equity Life (up 46%).
Total benefits and expenses were $601 million versus negative $594 million a year ago due to higher insurance policy benefits, changes in future policy benefits, and interest sensitive and index product benefits along with amortization of deferred sales inducements, policy acquisition costs, and other operating costs and expenses.
Investment spread was 2%, down from 2.64% in the year-ago quarter.
Policyholder funds under management of $55.8 billion at quarter-end were up 3.2% from 2020-end.
Financial Update
Cash and cash equivalents were $11.1 billion on Mar 31, 2021, which increased 21.9% from 2020-end. Total investments were about $52.4 billion, which decreased 2.2% from 2020-end.
Notes payable totaled $495.8 million, marginally up 0.02% from 2020-end.
Book value per common share excluding AOCI was $39, up 8.4% from 2020-end.
Total debt/total capitalization was 11.6%, improving 60 basis points from 2020-end.
Operating return on equity excluding average AOCI was 8.54%.
Zacks Rank
American Equity currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Life Insurers
First-quarter earnings of Assurant, Inc. (AIZ - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and Everest Re Group, Ltd. beat the respective Zacks Consensus Estimate.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>