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Primerica's (PRI) Q2 Earnings Miss Estimates, Revenues Up Y/Y

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Primerica, Inc. (PRI - Free Report) delivered second-quarter 2021 operating income of $2.86 per share, which missed the Zacks Consensus Estimate by 5.3%. The bottom line improved 12%, reflecting better performance at the term life insurance business.

Primerica, Inc. Price, Consensus and EPS Surprise


Operational Update

Operating revenues grew 2.7% year over year to $671.8 million on higher contributions from the Term Life Insurance segment. Revenues however missed the Zacks Consensus Estimate by 2.2%.

Term Life Insurance revenues increased 7% year over year to $410.7 million, driven by 8% growth in adjusted direct premiums.

Investment and Savings Products revenues dropped 7% to $222.4 million. Corporate and Other Distributed Products revenues declined 18% to $26.9 million. Senior Health generated $11.8 million in revenues in the reported quarter.

Life Insurance policies issued in the quarter were 77,000 new term life insurance policies. Investment and Savings Products sales declined 12% to $2.7 billion in the second quarter.

Total benefits and expenses of $531.4.8 million were up 9.5% year over year.

Adjusted operating income before taxes decreased 16% year over year as Investment and Savings Products income dropped 17%.

However, Term Life Insurance operating income rose 3%.

Financial Update

Cash and cash equivalents were $400 million as of Jun 30, 2022, up 1.9% from the level on Dec 31, 2021.

Total investments were $4.1 billion, down 4.7% from the figure as of Dec 31, 2021.

Debts were $592.5 million, up 0.01% from the 2021-end level.

Stockholders’ equity totaled $1.8 billion, down 14.7% from the level on Dec 31, 2021.

Primerica Life Insurance Company’s statutory risk-based capital ratio was about 460% as of Jun 30, 2022

Capital Deployment Update

Primerica bought back shares worth $128 million in the reported quarter and expects to complete its announced repurchases of $306 million for 2022 in the third quarter.

The board of directors approved a dividend of 55 cents per share, to be paid out on Sep 14, 2022, to stockholders of record as of Aug 22, 2022.

Zacks Rank

Primerica 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 Life Insurers

Of the insurance industry players that have reported second-quarter results so far, Sun Life Financial Inc. (SLF - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) beat the Zacks Consensus Estimate while Lincoln National Corporation (LNC - Free Report) missed the mark.

Sun Life’s underlying net income of $1.19 per share beat the Zacks Consensus Estimate by 10.2%. The bottom line decreased 2.4% year over year. Insurance sales increased 19.5% year over year to $690.8 million (C$736 million), driven by increased sales in Canada and United States. Wealth sales increased 20% year over year to $53.8 billion (C$57.4 billion) in the quarter under review. Value of new business improved 10% to $254.4 million (C$271 million).

Reinsurance Group of America’s adjusted operating earnings of $5.78 per share beat the Zacks Consensus Estimate by 112.5% and increased 44.5% from the year-ago quarter’s figure. Operating revenues of $4.1 billion beat the Zacks Consensus Estimate by 3.3% and improved 2.9% year over year on higher net premiums.

Net premiums of $3.2 billion rose 4.3% year over year. Investment income increased 3.6% from the prior-year quarter to $397 million, reflecting a higher average asset balance. The average investment yield remained flat year over year at 4.63%.

Lincoln National’s adjusted earnings of $2.23 per share lagged the Zacks Consensus Estimate by 5.1% and fell 29.7% year over year. Adjusted operating revenues of $4,641 million declined 5.3% year over year but outpaced the consensus mark by 4.1%.

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