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Lincoln National (LNC) Q3 Earnings, What to Expect?

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Lincoln National Corp. (LNC - Free Report) is scheduled to report third-quarter 2018 results on Nov 1, after market close.

The company’s Annuities business should gain from higher fee income from account value growth and lower expenses. Total annuity deposits should grow from product and distribution expansion. The company’s annuity business is poised to industry wide factors such as higher interest rates and improved regulatory conditions.

In the company’s Life Insurance segment, sales should have increased led by rolling out of new products in the recent months. The company mentioned that with mortality typically more favorable in the second half of the year. This should lead to growth in underwriting profit as lower mortality leads to lower claims which increases underwriting profits.

In Retirement Plan Services segment, total deposits should increase from growth in both first-year sales and recurring deposits. Earnings should gain from a lower tax rate, higher fee income and lower expenses.

The Group Protection business should see an increase in earnings from the acquisition of the Liberty Mutual group benefits business. The Liberty acquisition broadened the company’s customer base and distribution access. The acquisition was accretive to the in the second quarter and we expect to see the same in the third quarter. Management expects premiums in the third quarter to be approximately $1 billion, which factors in a full three months of Liberty contributions.

Lincoln National resumed share buyback in the second quarter, which was put on hold due to the acquisition of Liberty acquisition. Therefore the bottom line should gain from share repurchases made by the company in the third quarter.

Earnings Surprise

The company boasts an attractive earnings surprise history. It beat estimates in three out of the trailing four quarters, delivering an average positive surprise of 2.53%.

Lincoln National Corporation Price and EPS Surprise

Here is What our Quantitative Model Predicts

Our proven model does not conclusively show that Lincoln National is likely to beat on earnings this quarter. This is because a stock needs to have both a positive  Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Lincoln National has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Lincoln National carries a Zacks Rank #2, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Stocks That Warrant a Look

Here are some companies from the insurance sector that you may want to consider as these have the right combination of elements to beat on earnings this quarter:

Prudential Financial, Inc. (PRU - Free Report) is expected to report third-quarter 2018 earnings results on Nov 7. The company has an Earnings ESP of +0.13% and a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNA Financial Corporation (CNA - Free Report) is expected to report third-quarter 2018 earnings results on Nov 5. The company has an Earnings ESP of +4.19% and a Zacks Rank #2.

Willis Tower Watson Public Limited Company has an Earnings ESP of +3.91% and a Zacks Rank #3. The company is expected to report third-quarter earnings results on Nov 2.

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