It has been about a month since the last earnings report for CNO Financial Group, Inc. (CNO - Free Report) . Shares have added about 2.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
CNO Financial Beats Q2 Earnings & Revenue Estimates
CNO Financial's second-quarter 2017 net operating earnings of $0.45 per share surpassed the Zacks Consensus Estimate by 21.6%. The bottom line also improved 28.6% year over year on higher revenues.
CNO Financial’s total revenue increased 5.2% year over year to $1.1 billion. The top line also beat the Zacks Consensus Estimate by 5.8%.
Total collected premiums were $925.0 million, up 7% from the prior-year quarter. New annualized premiums for life and health products amounted to $81.9 million, down 9% from the year-ago quarter. First-year collected premiums totaled $352.3 million, up 16% from the last year quarter.
Quarterly Segment Update
Total collected premiums were $680.6 million, up 8% year over year. This was primarily due to an increase in premiums from annuity products.
New annualized premiums decreased 13% year over year to $40.2 million due to lower sales of life products.
Pre-tax operating earnings grew 21% over the last-year quarter. The upside reflected higher spread income on annuities due to growth in the block and favorable margins on the long-term care block. It also reflected $5.9 million of higher income from call premiums and prepayments compared to the previous-year quarter.
Total collected premiums were $167.5 million, up 4% year over year. This was primarily due to higher sales of supplemental health products.
New Annualized premiums from life and health products were $25.6 million, up 5.8% from the last-year quarter.
Pre-tax operating earnings were up 10% year over year due to higher margins on the supplemental health block.
Total collected premiums were $72.5 million, up 4% year over year.
New annualized premiums were $16.1 million, down 16% from the year-ago quarter. Lower lead volume, primarily due to reduced marketing expenses, resulted in the deterioration.
The pre-tax operating earnings were $8.0 million, up 166% year over year principally due to favorable mortality and reduced marketing expenses.
The long-term care business was recaptured in Sep 2016. This segment recognized pre-tax earnings of $1.7 million in the second quarter.
The segment includes performance of the investment advisory subsidiary and corporate expenses.
Pre-tax loss was $13.2 million, wider than a loss of $7 million in the year-ago quarter. This was primarily due to higher expenses, partially offset by favorable investment returns.
Unrestricted cash and investments held by CNO Financial’sholding company were $278 million at Jun 30, 2017, up 5.3% from year-end 2016.
Book value per common share increased to $28.28 from $25.28 year over year. Book value per diluted share, excluding accumulated other comprehensive income, increased to $22.74 from $20.67 as of Jun 30, 2016.
Consolidated risk-based capital ratio was 458% as of Jun 30, 2017. This reflects estimated statutory operating earnings of $166 millionand insurance company dividends to the holding company of $177 million during the first six months of 2017.
Securities Repurchase and Divided Update
During the quarter, the company repurchased $68.9 million of common stock. During the first six months of 2017, it bought back 5.4 million common shares at a total cost of $111.9 million.
As of Jun 30, 2017, CNO Financial had 169.0 million shares outstanding and had authority to repurchase up to an additional $440.8 million of the common stock.
During the second quarter, dividends paid on common stock totaled $15.3 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
CNO Financial Group, Inc. Price and Consensus
At this time, CNO Financial's stock has a poor Growth Score of F, 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 quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable solely for value investors.
Notably, the stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months