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Why Is CNO (CNO) Up 9% Since Last Earnings Report?
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A month has gone by since the last earnings report for CNO Financial (CNO - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CNO Financial reported third-quarter 2023 adjusted earnings per share (EPS) of 88 cents, which beat the Zacks Consensus Estimate by 18.9%. Also, the bottom line jumped 31% year over year.
Total revenues increased 4.7% year over year to $947.5 million in the third quarter. The top line beat the consensus mark by 2.6%.
The strong third-quarter revenues were supported by increased new annualized premiums, investment income and general account assets. The upside was partially offset by higher benefits and expenses.
Quarterly Performance
Total insurance policy income of $626 million rose 0.4% year over year on higher annuity and life insurance policy income but missed the Zacks Consensus Estimate of $632 million due to a decline in health insurance policy income.
CNO Financial’s net investment income increased 9% year over year to $291.8 million in the third quarter. General account assets grew 12.4% year over year to $324.8 million, comfortably beating the consensus mark of $295.8 million.
Annuity collected premiums of $372.2 million increased 1% year over year. New annualized premiums for health and life products advanced 13% year over year to $98.3 million.
Total benefits and expenses were $731.9 million, which jumped from $677.4 million a year ago. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Sep 30, 2023)
CNO Financial exited the third quarter with unrestricted cash and cash equivalents of $460.8 million, which declined from the 2022-end level of $575.7 million.
Total assets of $33.5 billion rose from $33.1 billion at 2022-end.
Total shareholders’ equity jumped to $1.9 billion from $1.8 billion as of Dec 31, 2022.
Book value per diluted share increased to $16.58 in the third quarter from $16.07 a year ago.
Adjusted operating return on equity came in at 8.5%, which deteriorated 340 basis points year over year.
The debt-to-capital ratio was 37.6% at the third-quarter end.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $56.9 million in the form of share buybacks worth $40 million and dividends of $16.9 million.
As of Sep 30, 2023, the company had remaining repurchase funds of $601.8 million.
2023 Guidance
CNO Financial now expects 2023 EPS in the range of $2.70-$2.80, indicating a decline from the 2022 figure of $3.06. The company expects the expense ratio to be in the range of 19.2-19.4% for 2023. It anticipates the effective tax rate for the year to be around 23%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, CNO has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, CNO 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
CNO is part of the Zacks Insurance - Multi line industry. Over the past month, Everest Group (EG - Free Report) , a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Everest Group reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of +25.6%. EPS of $14.14 for the same period compares with -$5.28 a year ago.
For the current quarter, Everest Group is expected to post earnings of $14.86 per share, indicating a change of +21.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Everest Group. Also, the stock has a VGM Score of A.
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Why Is CNO (CNO) Up 9% Since Last Earnings Report?
A month has gone by since the last earnings report for CNO Financial (CNO - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNO due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CNO Financial Q3 Earnings Beat Estimates, EPS View Revised
CNO Financial reported third-quarter 2023 adjusted earnings per share (EPS) of 88 cents, which beat the Zacks Consensus Estimate by 18.9%. Also, the bottom line jumped 31% year over year.
Total revenues increased 4.7% year over year to $947.5 million in the third quarter. The top line beat the consensus mark by 2.6%.
The strong third-quarter revenues were supported by increased new annualized premiums, investment income and general account assets. The upside was partially offset by higher benefits and expenses.
Quarterly Performance
Total insurance policy income of $626 million rose 0.4% year over year on higher annuity and life insurance policy income but missed the Zacks Consensus Estimate of $632 million due to a decline in health insurance policy income.
CNO Financial’s net investment income increased 9% year over year to $291.8 million in the third quarter. General account assets grew 12.4% year over year to $324.8 million, comfortably beating the consensus mark of $295.8 million.
Annuity collected premiums of $372.2 million increased 1% year over year. New annualized premiums for health and life products advanced 13% year over year to $98.3 million.
Total benefits and expenses were $731.9 million, which jumped from $677.4 million a year ago. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Sep 30, 2023)
CNO Financial exited the third quarter with unrestricted cash and cash equivalents of $460.8 million, which declined from the 2022-end level of $575.7 million.
Total assets of $33.5 billion rose from $33.1 billion at 2022-end.
Total shareholders’ equity jumped to $1.9 billion from $1.8 billion as of Dec 31, 2022.
Book value per diluted share increased to $16.58 in the third quarter from $16.07 a year ago.
Adjusted operating return on equity came in at 8.5%, which deteriorated 340 basis points year over year.
The debt-to-capital ratio was 37.6% at the third-quarter end.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $56.9 million in the form of share buybacks worth $40 million and dividends of $16.9 million.
As of Sep 30, 2023, the company had remaining repurchase funds of $601.8 million.
2023 Guidance
CNO Financial now expects 2023 EPS in the range of $2.70-$2.80, indicating a decline from the 2022 figure of $3.06. The company expects the expense ratio to be in the range of 19.2-19.4% for 2023. It anticipates the effective tax rate for the year to be around 23%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, CNO has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, CNO 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
CNO is part of the Zacks Insurance - Multi line industry. Over the past month, Everest Group (EG - Free Report) , a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Everest Group reported revenues of $4.02 billion in the last reported quarter, representing a year-over-year change of +25.6%. EPS of $14.14 for the same period compares with -$5.28 a year ago.
For the current quarter, Everest Group is expected to post earnings of $14.86 per share, indicating a change of +21.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.8% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Everest Group. Also, the stock has a VGM Score of A.