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What's in the Cards for Lincoln National's (LNC) Q4 Earnings?
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Lincoln National Corporation (LNC - Free Report) is slated to report fourth-quarter 2022 results on Feb 8, after the market closes.
Q4 Estimates
The Zacks Consensus Estimate for Lincoln National’s fourth-quarter earnings per share is pegged at $1.89, which indicates a rise of 21.2% from the prior-year quarter’s reported figure. Our estimate for the metric stands at $1.95 per share.
The consensus mark for revenues stands at $4,524 million, suggesting a 5.1% fall from the year-ago quarter’s reported number but higher than our estimate of $4,360.6 million.
Earnings Surprise History
Lincoln National’s earnings missed estimates in each of the trailing four quarters, with the average negative surprise being 168.03%. This is depicted in the chart below:
Lincoln National Corporation Price and EPS Surprise
The top line of Lincoln National is expected to have suffered a blow due to reduced fee income and net investment income in the fourth quarter.
The Zacks Consensus Estimate for fee income stands at $1,521 million, suggesting a decline of 6.6% from the prior-year quarter’s reported number and also came lower than our estimate of $1,618.2 million. The consensus mark for net investment income is pegged at $1,333 million, which indicates a fall of 7.8% from the year-ago quarter’s reported number but outpaced our estimate of $1,284.7 million.
Nevertheless, LNC’s revenues are likely to have been partly offset by growing insurance premiums. The Zacks Consensus Estimate for fourth-quarter insurance premiums is pegged at $1,475 million, implying a 3.9% growth from the prior-year quarter’s reported figure and higher than our estimate of $1,415.2 million.
Only the Group Protection segment of Lincoln National is expected to have provided impetus to its quarterly results in the to-be-reported quarter. Strength in all products and market segments coupled with declining new group disability claims might have shaped the segment’s performance. The consensus mark for segmental operating income stands at $44 million, higher than our estimate of $13.8 million.
However, lower contributions from Annuities, Retirement Plan Services and Life Insurance units are likely to have strained the quarterly performance of Lincoln National in the fourth quarter.
Drops in average account values and alternative investment income are expected to have dampened the performance of the Annuities as well as Retirement Plan Services segments. The Zacks Consensus Estimate for the operating income of the Annuities unit is pegged at $277 million, which indicates a fall of 29.2% from the prior-year quarter’s reported number but came in higher than our estimate of $274.3 million.
The consensus mark for operating income in the Retirement Plan Services segment stands at $55 million, suggesting a 19.1% decrease from the year-ago quarter’s reported figure.
Alternative investment income and the continued incidence of COVID-19-linked claims are likely to have weighed on the Life Insurance segment’s performance in the fourth quarter. The Zacks Consensus Estimate for segmental operating income is pegged at $70 million, which indicates a decline of 27.8% from the prior-year quarters’ reported figure.
Expense savings stemming from the Spark initiative are likely to have provided a boost to 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 -0.84% because the Most Accurate Estimate of $1.87 is pegged lower than the Zacks Consensus Estimate of $1.89. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: LNC currently has a Zacks Rank #5 (Strong 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:
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +5.73% and currently has a Zacks Rank #2. The Zacks Consensus Estimate for AIG’s fourth-quarter 2022 earnings is pegged at $1.19 per share, suggesting a decrease of 24.7% from the prior-year quarter’s reported number.
The bottom line of American International beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.01%.
Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for MFC’s fourth-quarter 2022 earnings is pegged at 61 cents per share, indicating a decline of 9% from the year-ago quarter’s reported figure.
The consensus mark for Manulife Financial’s fourth-quarter earnings has been revised 3.4% north over the past 30 days.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for SLF’s fourth-quarter 2022 earnings is pegged at $1.16 per share, suggesting 4.1% fall from the prior-year quarter’s reported figure.
The bottom line of Sun Life Financial beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 6.99%.
Image: Bigstock
What's in the Cards for Lincoln National's (LNC) Q4 Earnings?
Lincoln National Corporation (LNC - Free Report) is slated to report fourth-quarter 2022 results on Feb 8, after the market closes.
Q4 Estimates
The Zacks Consensus Estimate for Lincoln National’s fourth-quarter earnings per share is pegged at $1.89, which indicates a rise of 21.2% from the prior-year quarter’s reported figure. Our estimate for the metric stands at $1.95 per share.
The consensus mark for revenues stands at $4,524 million, suggesting a 5.1% fall from the year-ago quarter’s reported number but higher than our estimate of $4,360.6 million.
Earnings Surprise History
Lincoln National’s earnings missed estimates in each of the trailing four quarters, with the average negative surprise being 168.03%. 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
The top line of Lincoln National is expected to have suffered a blow due to reduced fee income and net investment income in the fourth quarter.
The Zacks Consensus Estimate for fee income stands at $1,521 million, suggesting a decline of 6.6% from the prior-year quarter’s reported number and also came lower than our estimate of $1,618.2 million. The consensus mark for net investment income is pegged at $1,333 million, which indicates a fall of 7.8% from the year-ago quarter’s reported number but outpaced our estimate of $1,284.7 million.
Nevertheless, LNC’s revenues are likely to have been partly offset by growing insurance premiums. The Zacks Consensus Estimate for fourth-quarter insurance premiums is pegged at $1,475 million, implying a 3.9% growth from the prior-year quarter’s reported figure and higher than our estimate of $1,415.2 million.
Only the Group Protection segment of Lincoln National is expected to have provided impetus to its quarterly results in the to-be-reported quarter. Strength in all products and market segments coupled with declining new group disability claims might have shaped the segment’s performance. The consensus mark for segmental operating income stands at $44 million, higher than our estimate of $13.8 million.
However, lower contributions from Annuities, Retirement Plan Services and Life Insurance units are likely to have strained the quarterly performance of Lincoln National in the fourth quarter.
Drops in average account values and alternative investment income are expected to have dampened the performance of the Annuities as well as Retirement Plan Services segments. The Zacks Consensus Estimate for the operating income of the Annuities unit is pegged at $277 million, which indicates a fall of 29.2% from the prior-year quarter’s reported number but came in higher than our estimate of $274.3 million.
The consensus mark for operating income in the Retirement Plan Services segment stands at $55 million, suggesting a 19.1% decrease from the year-ago quarter’s reported figure.
Alternative investment income and the continued incidence of COVID-19-linked claims are likely to have weighed on the Life Insurance segment’s performance in the fourth quarter. The Zacks Consensus Estimate for segmental operating income is pegged at $70 million, which indicates a decline of 27.8% from the prior-year quarters’ reported figure.
Expense savings stemming from the Spark initiative are likely to have provided a boost to 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 -0.84% because the Most Accurate Estimate of $1.87 is pegged lower than the Zacks Consensus Estimate of $1.89. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: LNC currently has a Zacks Rank #5 (Strong 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:
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +5.73% and currently has a Zacks Rank #2. The Zacks Consensus Estimate for AIG’s fourth-quarter 2022 earnings is pegged at $1.19 per share, suggesting a decrease of 24.7% from the prior-year quarter’s reported number.
The bottom line of American International beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.01%.
Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for MFC’s fourth-quarter 2022 earnings is pegged at 61 cents per share, indicating a decline of 9% from the year-ago quarter’s reported figure.
The consensus mark for Manulife Financial’s fourth-quarter earnings has been revised 3.4% north over the past 30 days.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for SLF’s fourth-quarter 2022 earnings is pegged at $1.16 per share, suggesting 4.1% fall from the prior-year quarter’s reported figure.
The bottom line of Sun Life Financial beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 6.99%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.