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CNO Financial (CNO) Q4 Earnings Beat on High Investment Income
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CNO Financial Group, Inc. (CNO - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.18, which beat the Zacks Consensus Estimate by 38.8%. Also, the bottom line jumped 66% year over year.
Total revenues increased 20.2% year over year to $1.2 billion in the fourth quarter. The top line beat the consensus mark by 25.3%.
The strong fourth-quarter results were supported by increased investment income, premiums and general account assets. The upside was partially offset by higher benefits and expenses.
What’s Coming?
CNO Financial now expects 2024 EPS in the range of $3.10-$3.30, indicating an increase from the 2023 figure of $3.09. The company expects the expense ratio to be in the range of 18.8-19.2% for 2024, improving from the 2023 level of 19.4%. It anticipates the effective tax rate for 2024 to be around 23%. It is also aiming at a leverage of 25-28% for this year.
Looking back at revenues, CNO’s 2023 top line of $4.1 billion rose 15.9% from 2022 levels and beat the consensus mark of $3.7 billion.
CNO Financial Group, Inc. Price, Consensus and EPS Surprise
Total insurance policy income of $625.7 million fell marginally year over year and missed the Zacks Consensus Estimate of $628.3 million due to a decline in health insurance policy income.
CNO’s net investment income increased 47% year over year to $465.2 million in the fourth quarter. General account assets grew 10.3% year over year to $325.1 million, comfortably beating the consensus mark by 10.2%. Also, the policyholder and other special-purpose portfolios jumped nearly seven times to $140.1 million.
Annuity collected premiums of $438.3 million increased 2% year over year. New annualized premiums for health and life products advanced 6% year over year to $96.1 million. Annuity, Health and Life products accounted for 23%, 53% and 24%, respectively, of CNO’s insurance margin.
Total benefits and expenses were $1.1 billion, which jumped 21.5% year-over-year. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Dec 31, 2023)
CNO Financial exited the fourth quarter with unrestricted cash and cash equivalents of $774.5 million, which increased from the 2022-end level of $575.7 million. Total assets of $35.1 billion rose from $33.1 billion at 2022-end.
The debt-to-capital ratio was 34% at the fourth-quarter end. It has no outstanding debt maturities till 2025. Long-term debt was at $3.3 billion as of Dec 31, 2023.
Total shareholders’ equity jumped to $2.2 billion from $1.8 billion as of Dec 31, 2022.
Book value per diluted share increased to $19.83 in the fourth quarter from $15.14 a year ago. Adjusted operating return on equity came in at 9.8%, which deteriorated from 10.8% a year ago.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $80 million in the form of share buybacks and dividends of $16.7 million.
As of Dec 31, 2023, the company had remaining repurchase funds of $521.8 million.
Zacks Rank & Other Key Picks
CNO Financial currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ryan Specialty’s 2023 full-year earnings indicates a 20.9% year-over-year increase. It beat earnings estimates in two of the past four quarters and met twice, with an average surprise of 5.1%. Also, the consensus mark for RYAN’s 2023 full-year revenues suggests 20.2% year-over-year growth.
The consensus mark for Chubb’s 2024 full-year earnings is pegged at $20.93 per share, which rose by 29 cents in the past week. It beat earnings estimates in all the past four quarters, with an average surprise of 23.4%. Furthermore, the consensus estimate for CB’s 2024 full-year revenues suggests 6.7% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s 2024 full-year earnings is pegged at $3.20 per share, which indicates 13.9% year-over-year growth. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%. The consensus mark for its 2024 full-year revenues suggests 6.7% year-over-year growth.
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CNO Financial (CNO) Q4 Earnings Beat on High Investment Income
CNO Financial Group, Inc. (CNO - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.18, which beat the Zacks Consensus Estimate by 38.8%. Also, the bottom line jumped 66% year over year.
Total revenues increased 20.2% year over year to $1.2 billion in the fourth quarter. The top line beat the consensus mark by 25.3%.
The strong fourth-quarter results were supported by increased investment income, premiums and general account assets. The upside was partially offset by higher benefits and expenses.
What’s Coming?
CNO Financial now expects 2024 EPS in the range of $3.10-$3.30, indicating an increase from the 2023 figure of $3.09. The company expects the expense ratio to be in the range of 18.8-19.2% for 2024, improving from the 2023 level of 19.4%. It anticipates the effective tax rate for 2024 to be around 23%. It is also aiming at a leverage of 25-28% for this year.
Looking back at revenues, CNO’s 2023 top line of $4.1 billion rose 15.9% from 2022 levels and beat the consensus mark of $3.7 billion.
CNO Financial Group, Inc. Price, Consensus and EPS Surprise
CNO Financial Group, Inc. price-consensus-eps-surprise-chart | CNO Financial Group, Inc. Quote
Fourth Quarter Performance
Total insurance policy income of $625.7 million fell marginally year over year and missed the Zacks Consensus Estimate of $628.3 million due to a decline in health insurance policy income.
CNO’s net investment income increased 47% year over year to $465.2 million in the fourth quarter. General account assets grew 10.3% year over year to $325.1 million, comfortably beating the consensus mark by 10.2%. Also, the policyholder and other special-purpose portfolios jumped nearly seven times to $140.1 million.
Annuity collected premiums of $438.3 million increased 2% year over year. New annualized premiums for health and life products advanced 6% year over year to $96.1 million. Annuity, Health and Life products accounted for 23%, 53% and 24%, respectively, of CNO’s insurance margin.
Total benefits and expenses were $1.1 billion, which jumped 21.5% year-over-year. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Dec 31, 2023)
CNO Financial exited the fourth quarter with unrestricted cash and cash equivalents of $774.5 million, which increased from the 2022-end level of $575.7 million. Total assets of $35.1 billion rose from $33.1 billion at 2022-end.
The debt-to-capital ratio was 34% at the fourth-quarter end. It has no outstanding debt maturities till 2025. Long-term debt was at $3.3 billion as of Dec 31, 2023.
Total shareholders’ equity jumped to $2.2 billion from $1.8 billion as of Dec 31, 2022.
Book value per diluted share increased to $19.83 in the fourth quarter from $15.14 a year ago. Adjusted operating return on equity came in at 9.8%, which deteriorated from 10.8% a year ago.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $80 million in the form of share buybacks and dividends of $16.7 million.
As of Dec 31, 2023, the company had remaining repurchase funds of $521.8 million.
Zacks Rank & Other Key Picks
CNO Financial currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader Finance space can consider some other top-ranked companies like Ryan Specialty Holdings, Inc. (RYAN - Free Report) , Chubb Limited (CB - Free Report) and Brown & Brown, Inc. (BRO - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ryan Specialty’s 2023 full-year earnings indicates a 20.9% year-over-year increase. It beat earnings estimates in two of the past four quarters and met twice, with an average surprise of 5.1%. Also, the consensus mark for RYAN’s 2023 full-year revenues suggests 20.2% year-over-year growth.
The consensus mark for Chubb’s 2024 full-year earnings is pegged at $20.93 per share, which rose by 29 cents in the past week. It beat earnings estimates in all the past four quarters, with an average surprise of 23.4%. Furthermore, the consensus estimate for CB’s 2024 full-year revenues suggests 6.7% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s 2024 full-year earnings is pegged at $3.20 per share, which indicates 13.9% year-over-year growth. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 11.2%. The consensus mark for its 2024 full-year revenues suggests 6.7% year-over-year growth.