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American Equity (AEL) Q1 Earnings Miss, Revenues Rise Y/Y

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American Equity Investment Life Holding Company (AEL - Free Report) reported first-quarter 2022 adjusted net earnings of 92 cents per share, which missed the Zacks Consensus Estimate by 3.1%. The bottom line however increased two-fold on a year-over-year basis.

American Equity witnessed higher net investment income, offset by lower premiums and annuity product charges.

Operational Update

Operating total revenues were $638.4 million, up 11.9% year over year on the back of higher net investment income and other revenues.

Premiums and other considerations decreased 23.7% year over year to $10.1 million. Annuity product charges decreased 12.9%.

Net investment income increased 14.1% on a year-over-year basis to $567.4 million. The upside was due to a higher average yield on investments, resulting from strong returns from partnerships and other mark-to-market assets, lower cash balances as well as an increase in allocation to higher yielding privately sourced assets.

Total benefits and expenses were negative $573.5 million versus $600.9 million a year ago due to lower insurance policy benefits and change in future policy benefits, interest-sensitive and index product benefits and interest expense on subordinated debentures.

The investment spread was 2.51%, up from 2% in the year-ago quarter.

Financial Update

Cash and cash equivalents was $1.9 billion on Mar 31, 2022, which decreased 57.1% from 2021-end. Total investments were about $58.5 billion, which decreased 3% from 2021-end.

Notes payable totaled $496.4 million, marginally up 0.03% from 2021-end.

Book value per common share excluding AOCI was $46.38, up 13.7% from 2021-end.

Total debt/total capitalization was 10.2%, improving 120 basis points from 2021-end.

Operating return on equity excluding average AOCI was 11.8%.

Zacks Rank

American Equity currently carries a Zacks Rank #4 (Sell).

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

Performance of Other Insurers

Voya Financial, Inc. (VOYA - Free Report) reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year.

Total revenues amounted to $1.5 billion against ($2 billion) in the year-ago quarter. Net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year. Premiums totaled $613 million versus ($5 billion) in the year-ago quarter.

Lincoln National Corporation (LNC - Free Report) reported first-quarter 2022 adjusted earnings of $1.66 per share, which missed the Zacks Consensus Estimate of $1.97. Also, the bottom line declined from the prior-year figure of $1.82 per share.

Adjusted operating revenues decreased to $4,718 million for the first quarter from $4,762 million a year ago. Also, it missed the consensus mark of $4,768 million.

Aon plc (AON - Free Report) reported first-quarter 2022 operating earnings of $4.83 per share, which missed the Zacks Consensus Estimate of $4.86. However, the bottom line climbed 13% year over year.

Total revenues improved 4% year over year to $3,670 million, which comprised organic revenue growth of 8%, partially offset by a 1% unfavorable impact from divestitures and a 3% unfavorable impact from foreign currency translation. The top line missed the consensus mark of $3,747 million.