It has been about a month since the last earnings report for Athene Holding . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Athene Holding due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Athene's Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Athene Holding Ltd.’s third-quarter 2021 adjusted operating income of $2.73 per share outpaced the Zacks Consensus Estimate by 27.6%. The bottom line improved 78.4% year over year.
The company’s results benefited from higher net investment income, higher premiums, and improved gross organic inflows, partly offset by higher expenses.
Behind the Headlines
Operating revenues of $8.3 billion increased more than five-fold year over year due to higher net investment income, premiums, other revenues and product charges.
Premiums of $6.7 billion increased 60-fold year over year in the third quarter. Net investment income was $1.5 billion in the quarter under review, up 21.9% year over year. Net invested assets of $166.2 billion as of Sep 30, 2021 improved 16.4% year over year.
Gross organic inflows totaled $11.9 billion in the quarter under review, increasing 61.3% year over year. It reflects the advantage of Athene's diversified funding channels, with particular strength on the institutional side of the business in funding agreements and pension group annuities (PGA).
Total benefits and expenses of $8 billion increased more than three-fold year over year in the quarter under review. The increase was primarily due to higher future policy and other policy benefits and policy and other operating expenses.
Quarterly Segmental Update
Retirement Services reported an adjusted operating income of $537 million, up 49% year over year, driven by strong growth in average net invested assets.
Corporate and Other generated an adjusted operating income of $4 million against the prior-year quarter’s operating loss of $59 million. The year-over-year improvement was driven by the change in fair value of Athene's AOG investment, partially offset by lower net investment income and an increase in interest expense and preferred dividends.
Financial Update
The company exited the third quarter with cash and cash equivalents of $7.7 billion, which improved 0.6% from the 2020-end level. Total debt of $2.5 billion at the end of the quarter increased 24.9% from the figure at 2020-end. Adjusted debt to capital ratio of 12.9 deteriorated 210 basis points (bps) year over year.
Adjusted book value per share was $71.50 as of Sep 30, 2021, up 33.4% year over year.
Athene exited the third quarter with excess capital of $3.6 billion and total deployable capital of $8 billion. Adjusted operating ROE of 15.6% contracted 390 bps year over year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 33.23% due to these changes.
VGM Scores
Currently, Athene Holding has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Athene Holding has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Athene Holding (ATH) Down 5.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Athene Holding . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Athene Holding due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Athene's Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Athene Holding Ltd.’s third-quarter 2021 adjusted operating income of $2.73 per share outpaced the Zacks Consensus Estimate by 27.6%. The bottom line improved 78.4% year over year.
The company’s results benefited from higher net investment income, higher premiums, and improved gross organic inflows, partly offset by higher expenses.
Behind the Headlines
Operating revenues of $8.3 billion increased more than five-fold year over year due to higher net investment income, premiums, other revenues and product charges.
Premiums of $6.7 billion increased 60-fold year over year in the third quarter. Net investment income was $1.5 billion in the quarter under review, up 21.9% year over year. Net invested assets of $166.2 billion as of Sep 30, 2021 improved 16.4% year over year.
Gross organic inflows totaled $11.9 billion in the quarter under review, increasing 61.3% year over year. It reflects the advantage of Athene's diversified funding channels, with particular strength on the institutional side of the business in funding agreements and pension group annuities (PGA).
Total benefits and expenses of $8 billion increased more than three-fold year over year in the quarter under review. The increase was primarily due to higher future policy and other policy benefits and policy and other operating expenses.
Quarterly Segmental Update
Retirement Services reported an adjusted operating income of $537 million, up 49% year over year, driven by strong growth in average net invested assets.
Corporate and Other generated an adjusted operating income of $4 million against the prior-year quarter’s operating loss of $59 million. The year-over-year improvement was driven by the change in fair value of Athene's AOG investment, partially offset by lower net investment income and an increase in interest expense and preferred dividends.
Financial Update
The company exited the third quarter with cash and cash equivalents of $7.7 billion, which improved 0.6% from the 2020-end level. Total debt of $2.5 billion at the end of the quarter increased 24.9% from the figure at 2020-end. Adjusted debt to capital ratio of 12.9 deteriorated 210 basis points (bps) year over year.
Adjusted book value per share was $71.50 as of Sep 30, 2021, up 33.4% year over year.
Athene exited the third quarter with excess capital of $3.6 billion and total deployable capital of $8 billion. Adjusted operating ROE of 15.6% contracted 390 bps year over year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 33.23% due to these changes.
VGM Scores
Currently, Athene Holding has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Athene Holding has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.