Primerica, Inc. (PRI Quick QuotePRI - Free Report) shares have lost nearly 1% since it reported first-quarter earnings on May 6, 2024. Investors are concerned about the poor performance in the Senior Health segment due to the high cost of acquisition and lower sales volume. It expects a loss of around $25-30 million in 2024 in this segment. However, an increase in average client asset values, net investment income and rising commissions partially offset the negatives.

Primerica reported a first-quarter 2024 adjusted earnings of $3.91 per share, which missed the Zacks Consensus Estimate by 4.9%. However, the bottom line jumped 12% from the prior-year quarter.

The top line increased 6.7% year over year to $741.7 million. The figure beat the consensus mark by 0.4%.

Q1 Operational Update

Primerica reported net premiums of $431.3 million in the first quarter, up 4.5% from the year-ago level. The metric missed the consensus mark by a whisker. Net investment income rose 21.7% year over year to $37.8 million. The metric beat the consensus mark by 7.5%. Commissions and fees increased 10.1% from the year-ago period to $255 million. It beat the consensus mark by 3%.

Total benefits and expenses increased 7.7% in the first quarter to $563.6 million due to higher benefits and claims, sales commissions, insurance commissions and other operating expenses.

Adjusted net operating income jumped 4% year over year to $137 million in the first quarter. In March-end, PRI’s total independent life-licensed representatives were 142,855, which rose 5% from a year ago.

Segmental Update

Term Life Insurance: Adjusted operating revenues from the segment climbed 5% year over year to $440.4 million. Adjusted operating income before income taxes jumped 6% year over year to $138.4 million. However, it missed the consensus mark by 1.7%. The segment was supported by increased policies issued and an increase in adjusted direct premiums.

Investment and Savings Products: Adjusted operating revenues from the segment improved 16% year over year to $243.7 million. Adjusted operating income before income taxes rose 17% year over year to $65.6 million. The segment benefited from strong sales and robust equity market appreciation giving rise to average client asset values. It beat the consensus mark by 7.6%.

Senior Health: Adjusted operating revenues from the segment declined 63% year over year to $6.9 million. Adjusted operating loss before income taxes widened nearly three-fold year over year to $14.2 million. The metric was wider than the consensus mark of a loss of $2.7 million. The segment’s results were affected due to lower policies approved by carriers and lower sales volume.

Corporate and Other Distributed Products: Adjusted operating revenues from the unit rose 13% year over year to $50.7 million. Adjusted operating loss before income taxes widened 6% year over year to $11.7 million. The segment suffered from higher insurance and other operating expenses partially offset by improved net investment income.

Financial Update (as of Mar 31, 2024)

Primerica exited the first quarter with cash and cash equivalents of $593.4 million, which declined from the 2023-end level of $613.1 million. Total assets of $14.9 billion decreased from $15 billion at 2023-end.

Surplus note was $1.38 billion at the first-quarter end, down from $1.39 billion at 2023-end.

Total shareholders’ equity of $2.2 billion increased from the 2023-end level of $2.1 billion.

Operating cash flow in the first quarter of 2024 was recorded at $210.9 million, down from $175.9 million in the year-ago period.

Capital Deployment

PRI bought back shares worth $109 million in the first quarter. It paid regular dividends worth $26 million in the first quarter of 2024.

It approved a dividend of 75 cents per share, which will be paid on Jun 12, to shareholders on record as of May 21.

2024 Guidance

PRI expects growth in number of policies issued between 3-5% in 2024. It anticipates the Term Life Insurance unit’s adjusted direct premium to rise between 5 and 6% year over year.

Investment product sales are expected to grow in the high single digits in 2024.

Management expects a loss of around $25-30 million in 2024 in its Senior Health segment.

It expects its operating margin to be near 22% in 2024. Benefits and Claims ratio is expected to be around 58% in 2024. The company anticipates 6-8% growth in insurance and other operating expenses expected in 2024.

Zacks Rank

Primerica currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Players

Here are some other Finance sector players that have reported first-quarter results so far. The bottom-line results of Euronet Worldwide, Inc. (EEFT Quick QuoteEEFT - Free Report) , Virtu Financial, Inc. (VIRT Quick QuoteVIRT - Free Report) and Cboe Global Markets, Inc. (CBOE Quick QuoteCBOE - Free Report) beat the Zacks Consensus Estimate.

Euronet reported first-quarter adjusted earnings of $1.28 per share, which surpassed the Zacks Consensus Estimate by 28%. The bottom line soared 47%. Total revenues were $857 million, which improved 9% year over year and on a constant-currency basis. The top line beat the consensus mark by 2.3%. EEFT’s net income climbed 32.3% year over year to $26.2 million. Operating income of $64 million advanced 40% year over year, or 45% on a constant-currency basis. Adjusted EBITDA rose 17% year over year, or 19% on a constant-currency basis, to $108.8 million.

The EFT Processing segment recorded revenues of $217.2 million, which grew 13% year over year, or 12% on a constant-currency basis. Adjusted EBITDA soared 51% year over year, or 54% on a constant-currency basis, to $44.7 million. Total transactions of the unit climbed 36% to 2,502 million. The epay segment’s revenues advanced 8% year over year and on a constant-currency basis to $257.1 million. The Money Transfer segment generated revenues of $384.6 million, which advanced 7% year over year and on a constant-currency basis.

Virtu Financial reported first-quarter 2024 adjusted earnings per share of 76 cents, which outpaced the Zacks Consensus Estimate by 28.8%. The bottom line advanced 2.7% year over year. Total revenues improved 3.6% to $642.8 million. Adjusted net trading income slid 1.7% to $366.9 million. Revenues from commissions, net and technology services amounted to $118.6 million, which slipped 2.3% year over year. Interest and dividends income of $106 million climbed 28.9% year over year.

Adjusted EBITDA of VIRT declined 2.2% to $202.8 million. Adjusted EBITDA margin of 55.3% deteriorated 30 basis points year over year. Adjusted net trading income in the Market Making segment was $273.7 million, down 1.5% year over year. The segment’s revenues rose 4.4% to $521 million. The Execution Services unit recorded an adjusted net trading income of $93.2 million, which fell 2.1% year over year.

Cboe Global reported first-quarter 2024 adjusted earnings of $2.15 per share, which outpaced the Zacks Consensus Estimate by 5.4%. The bottom line increased 13% year over year. Total adjusted revenues of CBOE Global were $502.1 million, which improved 7% year over year. The top line missed the consensus mark by 1.2%. Options revenues climbed 10% to $307.4 million. Revenues of North American Equities totaled $92.6 million, which decreased 1% year over year. Europe and Asia Pacific revenues increased 10% to $54.1 million.

Futures net revenues decreased 2% year over year to $30.5 million. Global FX net revenues decreased 1% to $18.4 million, primarily due to lower net transaction and clearing fees. Adjusted operating income grew 8% to $309.2 million. Adjusted operating margin was 61.6%, which expanded 110 basis points year over year. Adjusted EBITDA margin of 67.2% expanded 140 bps year over year.