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Why Is Globe Life (GL) Up 6.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Globe Life (GL - Free Report) . Shares have added about 6.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Globe Life due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Globe Life Q3 Earnings Top Estimates on Improved Premiums
Globe Life Inc.’s third-quarter 2023 net operating income of $2.71 per share beat the Zacks Consensus Estimate by 2.3%. The bottom line improved 26% year over year, primarily driven by higher excess investment income. The company reported operating revenues of $1.4 billion, up 5% from the year-ago quarter. The improvement was driven by growth in Life and Health insurance premiums and higher net investment income. The top line beat the Zacks Consensus Estimate by a whisker.
The strong quarterly results of Globe Life were supported by improving life and health premiums and net investment income. Higher expenses partially offset the upside.
Behind the Headlines
Globe Life reported total premium revenues of $1.1 billion, up 3.7% year over year. This upside was primarily driven by higher premiums from Life and Health insurance.
Net investment income increased 8.2% year over year to $266.9 million. Excess investment income, a measure of profitability, increased 41% year over year to $33.9 million.
Total insurance underwriting income increased 17% year over year to $324.3 million. The increase was due to improved Life underwriting income. Administrative expenses were down 1% year over year to $74.6 million. Total benefits and expenses increased 0.3% year over year to $1.1 billion, primarily due to higher amortization of deferred acquisition costs, commissions, premium taxes, non-deferred acquisition costs and interest expenses.
Segmental Results
Premium revenues at Life increased 3.9% year over year to $788.1 million, driven by higher premiums written by distribution channels like American Income, Direct to Consumer, Liberty National and Family Heritage Division. American Income grew 6%, Direct to Consumer increased 1% and Liberty National gained 7%. Net sales of $134.2 million increased 6% year over year. Underwriting margins improved 21% year over year to $300 million.
Health insurance premium revenues rose 3% year over year to $331.2 million, primarily driven by higher premiums from United American, Family Heritage, Liberty National and American Income. Net health sales increased 16% year over year to $54.9 million. Underwriting margins decreased 4% year over year to $96.7 million.
Financial Update
Shareholders’ equity, excluding accumulated other comprehensive income (AOCI), as of Sep 30, 2023, increased 7.6% year over year to $7.1 billion.
As of Sep 30, 2023, Globe Life reported book value per share, excluding AOCI, of $74.31, up 10.7% year over year. Operating return on equity, excluding AOCI, was 14.7% in the reported quarter, which contracted 100 basis points year over year.
Share Repurchase
Globe Life repurchased 0.75 million shares worth $84 million in the reported quarter.
2023 View
GL estimates net operating income between $10.49 per share and $10.65 per share for the year ending Dec 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Globe Life 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 B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Globe Life has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Globe Life is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, American Express (AXP - Free Report) , a stock from the same industry, has gained 14.3%. The company reported its results for the quarter ended September 2023 more than a month ago.
American Express reported revenues of $15.38 billion in the last reported quarter, representing a year-over-year change of +13.5%. EPS of $3.30 for the same period compares with $2.47 a year ago.
American Express is expected to post earnings of $2.62 per share for the current quarter, representing a year-over-year change of +26.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for American Express. Also, the stock has a VGM Score of C.
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Why Is Globe Life (GL) Up 6.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Globe Life (GL - Free Report) . Shares have added about 6.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Globe Life due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Globe Life Q3 Earnings Top Estimates on Improved Premiums
Globe Life Inc.’s third-quarter 2023 net operating income of $2.71 per share beat the Zacks Consensus Estimate by 2.3%. The bottom line improved 26% year over year, primarily driven by higher excess investment income. The company reported operating revenues of $1.4 billion, up 5% from the year-ago quarter. The improvement was driven by growth in Life and Health insurance premiums and higher net investment income. The top line beat the Zacks Consensus Estimate by a whisker.
The strong quarterly results of Globe Life were supported by improving life and health premiums and net investment income. Higher expenses partially offset the upside.
Behind the Headlines
Globe Life reported total premium revenues of $1.1 billion, up 3.7% year over year. This upside was primarily driven by higher premiums from Life and Health insurance.
Net investment income increased 8.2% year over year to $266.9 million. Excess investment income, a measure of profitability, increased 41% year over year to $33.9 million.
Total insurance underwriting income increased 17% year over year to $324.3 million. The increase was due to improved Life underwriting income.
Administrative expenses were down 1% year over year to $74.6 million. Total benefits and expenses increased 0.3% year over year to $1.1 billion, primarily due to higher amortization of deferred acquisition costs, commissions, premium taxes, non-deferred acquisition costs and interest expenses.
Segmental Results
Premium revenues at Life increased 3.9% year over year to $788.1 million, driven by higher premiums written by distribution channels like American Income, Direct to Consumer, Liberty National and Family Heritage Division. American Income grew 6%, Direct to Consumer increased 1% and Liberty National gained 7%. Net sales of $134.2 million increased 6% year over year. Underwriting margins improved 21% year over year to $300 million.
Health insurance premium revenues rose 3% year over year to $331.2 million, primarily driven by higher premiums from United American, Family Heritage, Liberty National and American Income. Net health sales increased 16% year over year to $54.9 million. Underwriting margins decreased 4% year over year to $96.7 million.
Financial Update
Shareholders’ equity, excluding accumulated other comprehensive income (AOCI), as of Sep 30, 2023, increased 7.6% year over year to $7.1 billion.
As of Sep 30, 2023, Globe Life reported book value per share, excluding AOCI, of $74.31, up 10.7% year over year. Operating return on equity, excluding AOCI, was 14.7% in the reported quarter, which contracted 100 basis points year over year.
Share Repurchase
Globe Life repurchased 0.75 million shares worth $84 million in the reported quarter.
2023 View
GL estimates net operating income between $10.49 per share and $10.65 per share for the year ending Dec 31, 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Globe Life 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 B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Globe Life has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Globe Life is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, American Express (AXP - Free Report) , a stock from the same industry, has gained 14.3%. The company reported its results for the quarter ended September 2023 more than a month ago.
American Express reported revenues of $15.38 billion in the last reported quarter, representing a year-over-year change of +13.5%. EPS of $3.30 for the same period compares with $2.47 a year ago.
American Express is expected to post earnings of $2.62 per share for the current quarter, representing a year-over-year change of +26.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for American Express. Also, the stock has a VGM Score of C.