It has been about a month since the last earnings report for Globe Life (GL Quick QuoteGL - Free Report) . Shares have added about 10% in that time frame, outperforming 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 catalysts.

Globe Life Q1 Earnings Miss Estimates, Revenues Rise Y/Y

Globe Life Inc.’s first-quarter 2024 net operating income of $2.78 per share missed the Zacks Consensus Estimate by 0.7%. The bottom line improved 10% year over year, primarily driven by higher insurance underwriting income and excess investment income.

Behind the Headlines

Globe Life reported total premium revenues of $1.1 billion, up 5% year over year. This upside was primarily driven by higher premiums from Life and Health insurance. Net investment income increased 10% year over year to $282.5 million.

The company reported operating revenues of $1.4 billion, up 5.5% from the year-ago quarter. The improvement was driven by growth in Life and Health insurance premiums and higher net investment income. Excess investment income, a measure of profitability, increased 50% year over year to $43.7 million.

Total insurance underwriting income increased 4.2% year over year to $324 million. The increase was attributable to higher Life and Health underwriting income.

Administrative expenses were up 8.8% year over year to $80.4 million.
Total benefits and expenses increased 5.1% year over year to $1 billion, primarily due to higher total policyholder benefits, amortization of deferred acquisition costs, commissions, premium taxes and non-deferred acquisition costs, as well as other operating expenses and interest expenses.

Segmental Results

Premium revenues at Life increased 4% year over year to $804.2 million, driven by higher premiums written by distribution channels like American Income and Liberty National. American Income and Liberty National gained 7% each year over year.

Net sales of $149.4 million increased 7% on a year-over-year basis. Underwriting margins increased 6% year over year to $309 million.

Health insurance premium revenues rose 6% year over year to $341 million, primarily driven by higher premiums from United American, American Income, Direct to Consumer and Family Heritage. Net health sales increased 9% year over year to $54 million. Underwriting margins increased 3% year over year to $93.7 million.

Financial Update

Shareholders’ equity, excluding accumulated other comprehensive income (AOCI), as of Mar 31, 2024, increased 10.2% year over year to $7.5 billion.
As of Mar 31, 2024, Globe Life reported book value per share, excluding AOCI, of $79, up 12.3% year over year.

Operating return on equity, excluding AOCI, was 14.3% in the reported quarter, which contracted 30 basis points year over year.

Share Repurchase

Globe Life repurchased 0.1 million shares worth $15.6 million in the reported quarter.

2024 View

Globe Life projects net operating income in the range of $11.50-$12.00 per share for the year ending Dec 31, 2024. The company anticipates approximately $350-$370 million of share repurchases for 2024.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Globe Life has a nice Growth Score of B, a grade with the same score on the momentum front. 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

Globe Life has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Globe Life belongs to the Zacks Financial - Miscellaneous Services industry. Another stock from the same industry, American Express (AXP Quick QuoteAXP - Free Report) , has gained 1.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

American Express reported revenues of $15.8 billion in the last reported quarter, representing a year-over-year change of +10.6%. EPS of $3.33 for the same period compares with $2.40 a year ago.

American Express is expected to post earnings of $3.21 per share for the current quarter, representing a year-over-year change of +11.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.

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 D.