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CNO Financial (CNO) Down 4% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CNO Financial Group, Inc. (CNO - Free Report) . Shares have lost about 4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 drivers.
CNO Financial’s first-quarter 2017 net operating earnings of $0.34 per share surpassed the Zacks Consensus Estimate by 9.7%. The bottom line also improved 26% year over year on higher revenues.
CNO Financial’s total revenue increased 11.4% year over year to $1 billion. The top line also topped the Zacks Consensus Estimate by 10.1%.
Total collected premiums were $940.0 million, up 5% from the prior-year quarter. New annualized premiums for life and health products amounted to $91.3 million, down 3% from the year-ago quarter.
Quarterly Segment Update
Bankers Life
Total collected premiums were $687.8 million, up 4% year over year. This was primarily due to an increase in premiums from annuity products.
New annualized premiums decreased 3% year over year to $44.9 million due to lower sales of life products.
Pre-tax operating earnings grew 16% over the last-year quarter on the back of higher spread income on annuities, favorable margins on the long-term care and Medicare supplement blocks.
WashingtonNational
Total collected premiums were $173.1 million, up 5% year over year. This was primarily due to higher sales of supplemental health products.
New Annualized premiums from life and health products were $24.6 million, up 5% from the last-year quarter.
Pre-tax operating earnings were down 11% year over year due to lower margins on the supplemental health block than the last-year quarter.
Colonial Penn
Total collected premiums were $74.5 million, up 6.3% year over year. This was primarily due to recent sales activity and steady persistency.
New annualized premiums were $21.8 million, down 10% from the year-ago quarter. Lower lead volume, primarily due to reduced marketing expenses, resulted in the deterioration.
The pre-tax operating loss was $0.3 million, narrower than a loss of $6.8 million in first-quarter 2016. The improvement was driven by reduced marketing expenses.
Corporate Operations
The segment includes performance of the investment advisory subsidiary and corporate expenses.
Pre-tax loss was $8.9 million, wider than a loss of $8.1 million in the year-ago quarter. This was primarily due to higher expenses, partially offset by favorable investment returns.
Financial Update
Unrestricted cash and investments held by CNO Financial’sholding company were $314 million at Mar 31, 2016, up 19% over year-end 2016.
Book value per common share increased to $26.77 from $25.82 at year-end 2016. Book value per diluted share, excluding accumulated other comprehensive income, increased to $22.31 from $22.02 as of Dec 31, 2016
Consolidated risk-based capital ratio was 446% as of Mar 31, 2016. This reflects estimated statutory operating earnings of $70 millionand insurance company dividends to the holding company of $128.4 million during the first three months of 2017.
Securities Repurchase and Divided Update
During the quarter, CNO Financial repurchased shares worth $43 millionand paid dividends of $14 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
At this time, the stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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CNO Financial (CNO) Down 4% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CNO Financial Group, Inc. (CNO - Free Report) . Shares have lost about 4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 drivers.
CNO Financial’s Q1 Earnings, Revenues Beat Estimates
CNO Financial’s first-quarter 2017 net operating earnings of $0.34 per share surpassed the Zacks Consensus Estimate by 9.7%. The bottom line also improved 26% year over year on higher revenues.
CNO Financial’s total revenue increased 11.4% year over year to $1 billion. The top line also topped the Zacks Consensus Estimate by 10.1%.
Total collected premiums were $940.0 million, up 5% from the prior-year quarter. New annualized premiums for life and health products amounted to $91.3 million, down 3% from the year-ago quarter.
Quarterly Segment Update
Bankers Life
Total collected premiums were $687.8 million, up 4% year over year. This was primarily due to an increase in premiums from annuity products.
New annualized premiums decreased 3% year over year to $44.9 million due to lower sales of life products.
Pre-tax operating earnings grew 16% over the last-year quarter on the back of higher spread income on annuities, favorable margins on the long-term care and Medicare supplement blocks.
WashingtonNational
Total collected premiums were $173.1 million, up 5% year over year. This was primarily due to higher sales of supplemental health products.
New Annualized premiums from life and health products were $24.6 million, up 5% from the last-year quarter.
Pre-tax operating earnings were down 11% year over year due to lower margins on the supplemental health block than the last-year quarter.
Colonial Penn
Total collected premiums were $74.5 million, up 6.3% year over year. This was primarily due to recent sales activity and steady persistency.
New annualized premiums were $21.8 million, down 10% from the year-ago quarter. Lower lead volume, primarily due to reduced marketing expenses, resulted in the deterioration.
The pre-tax operating loss was $0.3 million, narrower than a loss of $6.8 million in first-quarter 2016. The improvement was driven by reduced marketing expenses.
Corporate Operations
The segment includes performance of the investment advisory subsidiary and corporate expenses.
Pre-tax loss was $8.9 million, wider than a loss of $8.1 million in the year-ago quarter. This was primarily due to higher expenses, partially offset by favorable investment returns.
Financial Update
Unrestricted cash and investments held by CNO Financial’sholding company were $314 million at Mar 31, 2016, up 19% over year-end 2016.
Book value per common share increased to $26.77 from $25.82 at year-end 2016. Book value per diluted share, excluding accumulated other comprehensive income, increased to $22.31 from $22.02 as of Dec 31, 2016
Consolidated risk-based capital ratio was 446% as of Mar 31, 2016. This reflects estimated statutory operating earnings of $70 millionand insurance company dividends to the holding company of $128.4 million during the first three months of 2017.
Securities Repurchase and Divided Update
During the quarter, CNO Financial repurchased shares worth $43 millionand paid dividends of $14 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower.
CNO Financial Group, Inc. Price and Consensus
CNO Financial Group, Inc. Price and Consensus | CNO Financial Group, Inc. Quote
VGM Scores
At this time, the stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.