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Can Corebridge (CRBG) Q4 Earnings Beat on Investment Income?
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Corebridge Financial, Inc. (CRBG - Free Report) is poised to surpass fourth-quarter 2023 earnings expectations when it announces results on Feb 15, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share of 99 cents suggests a 12.5% increase from the prior-year figure of 88 cents. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of $5.4 billion indicates a 1.4% increase from the year-ago reported figure.
Corebridge beat the consensus estimate for earnings in three of the trailing four quarters and missed once, with the average surprise being 11.7%. This is depicted in the graph below:
Our proven model predicts a likely earnings beat for Corebridge this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: Corebridge has an Earnings ESP of +2.26%. This is because the Most Accurate Estimate is currently pegged at $1.01 per share, higher than the Zacks Consensus Estimate of 99 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Corebridge currently has a Zacks Rank #3.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at CRBG’s previous-quarter performance first.
Q3 Earnings Rewind
In the last reported quarter, the retirement solutions provider’s adjusted earnings of $1.05 per share missed the Zacks Consensus Estimate by a penny due to reduced pension risk transfer transaction volume and escalating interest expenses on financial debt. However, the downside was partly offset by strong contributions from the Individual Retirement and Life Insurance segments and improved variable investment income.
For the fourth quarter, premiums and deposits from Institutional Markets are expected to have increased on the back of higher guaranteed investment contracts issuance volumes. Similarly, expanding fixed index annuities and deposits are likely to have boosted Individual Retirement’s premiums and deposits.
The company’s overall portfolio is expected to have witnessed continued growth, boosting its base spread income. Furthermore, increased net investment income due to improved base portfolio income is expected to be a major contributor for the upside.
We expect net investment income in Institutional Markets alone to have increased nearly 41% in the fourth quarter. With improvement in Life Insurance’s underwriting margin CRBG’s profitability is expected to have increased in the fourth quarter.
The Group Retirement unit is expected to have continued witnessing higher fee income in the fourth quarter. Our estimate indicates a 5.7% year-over-year increase in the figure. The same for Individual Retirement is expected to have risen 3.6% in the quarter under review.
Also, lower policyholder benefits and interest expenses are expected to have aided the bottom line in the quarter. The above-mentioned factors are expected to have positioned Corebridge for year-over-year growth and an earnings beat in the fourth quarter. However, increased interest credited to policyholder account balances and general operating expenses are expected to partially offset the bottom-line growth.
How Other Insurance Stocks Performed
Here are some companies from the broader Finance space that have already reported earnings for the December quarter: Lincoln National Corporation (LNC - Free Report) , Aflac Incorporated (AFL - Free Report) and Unum Group (UNM - Free Report) .
Lincoln National reported fourth-quarter 2023 adjusted earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 9.9% on the back of solid contributions from the Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services unit. However, the upside was partly offset by changes in market risk benefits.
Aflac reported fourth-quarter 2023 adjusted earnings of $1.25 per share, missing the Zacks Consensus Estimate by 15%. Higher benefits and claims, lower adjusted net investment income and declining profit levels from the U.S. businesses affected AFL’s earnings. However, improving profit levels in the Japan segment partially offset the negatives.
Unum Group’s fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8% due to higher policy benefits, commissions, interest and debt expenses, and weaker performance in Unum International and Colonial Life. The negatives were partly offset by strong operations in the Unum U.S. unit.
Image: Bigstock
Can Corebridge (CRBG) Q4 Earnings Beat on Investment Income?
Corebridge Financial, Inc. (CRBG - Free Report) is poised to surpass fourth-quarter 2023 earnings expectations when it announces results on Feb 15, before the opening bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share of 99 cents suggests a 12.5% increase from the prior-year figure of 88 cents. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of $5.4 billion indicates a 1.4% increase from the year-ago reported figure.
Corebridge beat the consensus estimate for earnings in three of the trailing four quarters and missed once, with the average surprise being 11.7%. This is depicted in the graph below:
Corebridge Financial, Inc. Price and EPS Surprise
Corebridge Financial, Inc. price-eps-surprise | Corebridge Financial, Inc. Quote
What the Quantitative Model Suggests
Our proven model predicts a likely earnings beat for Corebridge this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: Corebridge has an Earnings ESP of +2.26%. This is because the Most Accurate Estimate is currently pegged at $1.01 per share, higher than the Zacks Consensus Estimate of 99 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Corebridge currently has a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at CRBG’s previous-quarter performance first.
Q3 Earnings Rewind
In the last reported quarter, the retirement solutions provider’s adjusted earnings of $1.05 per share missed the Zacks Consensus Estimate by a penny due to reduced pension risk transfer transaction volume and escalating interest expenses on financial debt. However, the downside was partly offset by strong contributions from the Individual Retirement and Life Insurance segments and improved variable investment income.
Let’s see how things have shaped up prior to the fourth-quarter earnings announcement.
Q4 Factors to Note
For the fourth quarter, premiums and deposits from Institutional Markets are expected to have increased on the back of higher guaranteed investment contracts issuance volumes. Similarly, expanding fixed index annuities and deposits are likely to have boosted Individual Retirement’s premiums and deposits.
The company’s overall portfolio is expected to have witnessed continued growth, boosting its base spread income. Furthermore, increased net investment income due to improved base portfolio income is expected to be a major contributor for the upside.
We expect net investment income in Institutional Markets alone to have increased nearly 41% in the fourth quarter. With improvement in Life Insurance’s underwriting margin CRBG’s profitability is expected to have increased in the fourth quarter.
The Group Retirement unit is expected to have continued witnessing higher fee income in the fourth quarter. Our estimate indicates a 5.7% year-over-year increase in the figure. The same for Individual Retirement is expected to have risen 3.6% in the quarter under review.
Also, lower policyholder benefits and interest expenses are expected to have aided the bottom line in the quarter. The above-mentioned factors are expected to have positioned Corebridge for year-over-year growth and an earnings beat in the fourth quarter. However, increased interest credited to policyholder account balances and general operating expenses are expected to partially offset the bottom-line growth.
How Other Insurance Stocks Performed
Here are some companies from the broader Finance space that have already reported earnings for the December quarter: Lincoln National Corporation (LNC - Free Report) , Aflac Incorporated (AFL - Free Report) and Unum Group (UNM - Free Report) .
Lincoln National reported fourth-quarter 2023 adjusted earnings of $1.45 per share, which outpaced the Zacks Consensus Estimate by 9.9% on the back of solid contributions from the Group Protection business, a strong fixed annuity business and positive flows in the Retirement Plan Services unit. However, the upside was partly offset by changes in market risk benefits.
Aflac reported fourth-quarter 2023 adjusted earnings of $1.25 per share, missing the Zacks Consensus Estimate by 15%. Higher benefits and claims, lower adjusted net investment income and declining profit levels from the U.S. businesses affected AFL’s earnings. However, improving profit levels in the Japan segment partially offset the negatives.
Unum Group’s fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8% due to higher policy benefits, commissions, interest and debt expenses, and weaker performance in Unum International and Colonial Life. The negatives were partly offset by strong operations in the Unum U.S. unit.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.