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Things to Know Ahead of Lincoln National's (LNC) Q3 Earnings
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Lincoln National Corporation (LNC - Free Report) is scheduled to release third-quarter 2022 results on Nov 2, after the closing bell.
Q3 Estimates
The Zacks Consensus Estimate for Lincoln National’s third-quarter earnings per share is pegged at $1.93, indicating an improvement of 19.1% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $4,374 million, suggesting a 16% drop from the year-ago quarter’s reported number.
Earnings Surprise History
Lincoln National’s earnings missed estimates in each of the trailing four quarters, the average negative surprise being 19.51%. This is depicted in the chart below:
Lincoln National Corporation Price and EPS Surprise
In the third quarter, Lincoln National’s revenues are likely to have been affected by lower fee income and net investment income. A weaker equity market is expected to have hurt net investment income (another revenue component) in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter fee income is pegged at $1,619 million, implying a decline of 18.9% from the prior-year quarter’s reported number. The consensus mark for net investment income stands at $1,294 million (suggesting a 17.9% fall from the year-ago quarter’s reported number), while our estimate for the metric stands at $1,292.9 million.
Despite the above-mentioned headwinds, LNC’s revenues are likely to have benefited from improved insurance premiums. This upside is expected to have been led by new sales growth, strong persistency rates and rate increases. The Zacks Consensus Estimate for third-quarter insurance premiums is pegged at $1,440 million, implying a 3.3% rise from the prior-year quarter’s reported figure. Our estimate for the metric stands at $1,377.8 million.
Reduced segmental contributions from Annuities, Retirement Plan Services and Life Insurance units might have dampened revenue growth of Lincoln National in the third quarter.
While lower average account values are likely to have weighed on the Annuities segment, reduced variable investment income is likely to have acted as a common factor for dampening results of both Annuities and Retirement Plan Services segments. The consensus mark for revenues of both segments stands at $1,126 million and $302 million, respectively, indicating a decrease of 11.1% and 7.9% each from their corresponding year-ago quarter’s reported numbers. Our estimate for the metrics suggests a fall of 10.3% and 9.7%, respectively, from the comparable year-ago period’s actuals.
Though the Life Insurance segment is likely to have witnessed strong term sales in the third quarter, a decline in alternative investment income might have affected its revenues. The Zacks Consensus Estimate for the segment’s revenues indicates a 26.2% fall from the prior-year quarters’ reported figure, while our estimate for the metric implies a 28.1% decline from the year-ago quarter’s reported figure.
The Group Protection segment remains the only segment that, riding on consistent pricing actions, improved underwriting results and cost savings from the Spark Initiative, is likely to have provided an impetus to LNC’s quarterly results.
The Zacks Consensus Estimate for the Group Protection segment’s third-quarter revenues stands at $1,289 million, suggesting 3.7% growth from the year-ago quarter’s reported number. Our estimate for the metric stands at $1,245.3 million.
Expense savings resulting from the Spark Initiative are likely to have aided Lincoln National’s margins in the to-be-reported quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Lincoln National this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here, as elaborated below.
Earnings ESP: Lincoln National has an Earnings ESP of -1.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lincoln National currently has a Zacks Rank #4 (Sell).
While an earnings beat looks uncertain for Lincoln National, here are some companies worth considering from the insurance space, as our model shows that these have the right combination of elements to beat on earnings this time around:
Hippo Holdings Inc. (HIPO - Free Report) has an Earnings ESP of +15.87% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for HIPO’s third-quarter 2022 earnings is pegged at a loss of $2.81 per share. The prior-year quarter’s loss per share was reported as $2.00.
The consensus mark for Hippo Holdings’ third-quarter revenues is pegged at $32.8 million, indicating 54.1% growth from the year-ago quarter’s reported figure.
Trean Insurance Group, Inc. has an Earnings ESP of +11.11% and is Zacks #3 Ranked, currently. The Zacks Consensus Estimate for TIG’s third-quarter 2022 earnings is pegged at 9 cents per share, suggesting a decrease of 40% from the prior-year quarter’s reported number.
The bottom line of Trean Insurance beat estimates in two of the trailing four quarters, met the same once and missed the mark on the remaining occasion, the average surprise being 11.25%.
Trupanion, Inc. (TRUP - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank #3, currently. The Zacks Consensus Estimate for TRUP’s third-quarter 2022 earnings is pegged at a loss of 29 cents per share. The prior-year quarter’s loss was reported as 4 cents per share.
Trupanion’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 44.79%.
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Things to Know Ahead of Lincoln National's (LNC) Q3 Earnings
Lincoln National Corporation (LNC - Free Report) is scheduled to release third-quarter 2022 results on Nov 2, after the closing bell.
Q3 Estimates
The Zacks Consensus Estimate for Lincoln National’s third-quarter earnings per share is pegged at $1.93, indicating an improvement of 19.1% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $4,374 million, suggesting a 16% drop from the year-ago quarter’s reported number.
Earnings Surprise History
Lincoln National’s earnings missed estimates in each of the trailing four quarters, the average negative surprise being 19.51%. This is depicted in the chart below:
Lincoln National Corporation Price and EPS Surprise
Lincoln National Corporation price-eps-surprise | Lincoln National Corporation Quote
Factors to Note
In the third quarter, Lincoln National’s revenues are likely to have been affected by lower fee income and net investment income. A weaker equity market is expected to have hurt net investment income (another revenue component) in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter fee income is pegged at $1,619 million, implying a decline of 18.9% from the prior-year quarter’s reported number. The consensus mark for net investment income stands at $1,294 million (suggesting a 17.9% fall from the year-ago quarter’s reported number), while our estimate for the metric stands at $1,292.9 million.
Despite the above-mentioned headwinds, LNC’s revenues are likely to have benefited from improved insurance premiums. This upside is expected to have been led by new sales growth, strong persistency rates and rate increases. The Zacks Consensus Estimate for third-quarter insurance premiums is pegged at $1,440 million, implying a 3.3% rise from the prior-year quarter’s reported figure. Our estimate for the metric stands at $1,377.8 million.
Reduced segmental contributions from Annuities, Retirement Plan Services and Life Insurance units might have dampened revenue growth of Lincoln National in the third quarter.
While lower average account values are likely to have weighed on the Annuities segment, reduced variable investment income is likely to have acted as a common factor for dampening results of both Annuities and Retirement Plan Services segments. The consensus mark for revenues of both segments stands at $1,126 million and $302 million, respectively, indicating a decrease of 11.1% and 7.9% each from their corresponding year-ago quarter’s reported numbers. Our estimate for the metrics suggests a fall of 10.3% and 9.7%, respectively, from the comparable year-ago period’s actuals.
Though the Life Insurance segment is likely to have witnessed strong term sales in the third quarter, a decline in alternative investment income might have affected its revenues. The Zacks Consensus Estimate for the segment’s revenues indicates a 26.2% fall from the prior-year quarters’ reported figure, while our estimate for the metric implies a 28.1% decline from the year-ago quarter’s reported figure.
The Group Protection segment remains the only segment that, riding on consistent pricing actions, improved underwriting results and cost savings from the Spark Initiative, is likely to have provided an impetus to LNC’s quarterly results.
The Zacks Consensus Estimate for the Group Protection segment’s third-quarter revenues stands at $1,289 million, suggesting 3.7% growth from the year-ago quarter’s reported number. Our estimate for the metric stands at $1,245.3 million.
Expense savings resulting from the Spark Initiative are likely to have aided Lincoln National’s margins in the to-be-reported quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Lincoln National this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here, as elaborated below.
Earnings ESP: Lincoln National has an Earnings ESP of -1.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Lincoln National currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for Lincoln National, here are some companies worth considering from the insurance space, as our model shows that these have the right combination of elements to beat on earnings this time around:
Hippo Holdings Inc. (HIPO - Free Report) has an Earnings ESP of +15.87% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for HIPO’s third-quarter 2022 earnings is pegged at a loss of $2.81 per share. The prior-year quarter’s loss per share was reported as $2.00.
The consensus mark for Hippo Holdings’ third-quarter revenues is pegged at $32.8 million, indicating 54.1% growth from the year-ago quarter’s reported figure.
Trean Insurance Group, Inc. has an Earnings ESP of +11.11% and is Zacks #3 Ranked, currently. The Zacks Consensus Estimate for TIG’s third-quarter 2022 earnings is pegged at 9 cents per share, suggesting a decrease of 40% from the prior-year quarter’s reported number.
The bottom line of Trean Insurance beat estimates in two of the trailing four quarters, met the same once and missed the mark on the remaining occasion, the average surprise being 11.25%.
Trupanion, Inc. (TRUP - Free Report) has an Earnings ESP of +3.51% and a Zacks Rank #3, currently. The Zacks Consensus Estimate for TRUP’s third-quarter 2022 earnings is pegged at a loss of 29 cents per share. The prior-year quarter’s loss was reported as 4 cents per share.
Trupanion’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 44.79%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.