It has been about a month since the last earnings report for Unum (UNM Quick QuoteUNM - Free Report) . Shares have added about 10% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Unum due for a pullback? 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 drivers.

Unum Group's Q4 Earnings & Revenues Top Estimates

Unum Group’s fourth-quarter 2021 operating net income of 89 cents per share beat the Zacks Consensus Estimate by 8.4%. The bottom line decreased 22.6% year over year.

Improved premium income and strong returns in alternative invested asset portfolio were weighed down by high COVID-related mortality and infection levels.

Operational Update         

Total operating revenues of Unum Group were nearly $3 billion, up 0.6% year over year on the back of higher premiums and other income. The top line marginally beat the Zacks Consensus Estimate.

Net investment income decreased 7.2% to $550.8 million.

Total benefits and expenses decreased 32.8% year over year to $2.8 billion, largely attributable to lower in benefits and change in reserves for future benefits.

Quarterly Segment Update

Unum U.S.: Premium income was $1.5 billion, up 3% year over year.

Adjusted operating income was down 43.3% year over year to $81.4 million, attributable to lower income at the group disability line of business, wider loss at group life and accidental death and dismemberment line of business.

Unum International: Premium income increased 1% year over year at $177.5 million.  Adjusted operating income was $27.1 million, up 30.9% year over year.

Unum UK line of business’ premium income was £114.5 million, up 5.1%, driven by growth in the in-force block resulting from the impact of rate increases in the group long-term disability product line and higher overall persistency. Adjusted operating income, in local currency, of £18.7 million was up 21.4%.

Benefit ratio of 81.4 deteriorated 580 basis points (bps) due to higher inflation-linked experience in benefits related to its group products.

Colonial Life: Premium income improved 1.1% to $423.3 million attributable to higher sales and a higher level of persistency. Sales increased 7.8% to $166.2 million. Adjusted operating income increased 12.4% to $80 million.

Benefit ratio improved 410 bps year over year to 52.5 driven by favorable incidence in all the product lines.

Closed Block: Premium income decreased 2.3% year over year to $244.5 million due to policy terminations and maturities, partially offset by premium rate increases on certain in-force businesses in the long-term care line of business. Adjusted operating income was $76.7 million, down 26.4% year over year.

Corporate: The segment incurred an operating loss of $45.7 million, wider than an operating loss of $42.7 million in the year-earlier quarter, attributable to higher interest and operating expenses.

Full-Year 2021 Highlights

Adjusted earnings were $4.35 per share, down 11.8% year over year. The bottom line beat the Zacks Consensus Estimate of $4.29.

Operating revenues of about $12 billion for 2021 inched down 0.2% year over year but marginally beat the consensus estimate.

Capital Management

As of Dec 31, 2021, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 395%.

Unum Group exited the quarter with cash and marketable securities worth $1.5 billion.

Book value per share of Unum Group improved 5.6% year over year to $56.37 as of Dec 31, 2021.

Unum bought back 1.9 million shares for $50 million in the fourth quarter

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -15.35% due to these changes.

VGM Scores

Currently, Unum has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Unum has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.