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Why Is CNO (CNO) Up 21.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for CNO Financial (CNO - Free Report) . Shares have added about 21.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNO due for a pullback? Before we dive into how investors and analysts have reacted as 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's first-quarter 2020 adjusted earnings per share of 58 cents beat the Zacks Consensus Estimate by 45%. The bottom line also improved 41.5% year over year on the back of growth in health and life production along with stable margins and expense management.
However, the company’s total revenues declined 29.9% year over year to $717 million due to realized losses and negative policyholder and other special-purpose portfolios. The top line also missed the consensus mark by 24.8%.
Quarterly Operational Update
Annuity collected premiums declined 7% year over year to $292.2 million due to pricing discipline.
New annualized premiums for life and health products amounted to $85.1 million, up 7% from the year-ago period.
Total insurance policy income inched up 2% year over year to $628.7 million.
Operating return on equity for the first quarter was 11.1%, expanding 60 bps year over year.
Total benefits and expenses decreased 17.7% year over year to $788.2 million, mainly on the back of lower insurance policy benefits, amortization and other operating costs.
Financial Update
Unrestricted cash and cash equivalents held by CNO Financial were $482 million as of Mar 31, 2020, down 16.9% from the level at 2019 end.
As of Mar 31, 2020, total assets were $32.7 billion, down 2.7% from the level at 2019 end.
Debt-to-capital was 20.8% as of Mar 31, 2020 compared with 17.5% at 2019 end.
Securities Repurchase and Divided Update
In the first quarter, the company returned $99.2 million in the form of share buybacks and dividend.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.12% due to these changes.
VGM Scores
Currently, CNO has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CNO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is CNO (CNO) Up 21.4% Since Last Earnings Report?
It has been about a month since the last earnings report for CNO Financial (CNO - Free Report) . Shares have added about 21.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is CNO due for a pullback? Before we dive into how investors and analysts have reacted as 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's Q1 Earnings Beat Estimates, Surge Y/Y
CNO Financial's first-quarter 2020 adjusted earnings per share of 58 cents beat the Zacks Consensus Estimate by 45%. The bottom line also improved 41.5% year over year on the back of growth in health and life production along with stable margins and expense management.
However, the company’s total revenues declined 29.9% year over year to $717 million due to realized losses and negative policyholder and other special-purpose portfolios. The top line also missed the consensus mark by 24.8%.
Quarterly Operational Update
Annuity collected premiums declined 7% year over year to $292.2 million due to pricing discipline.
New annualized premiums for life and health products amounted to $85.1 million, up 7% from the year-ago period.
Total insurance policy income inched up 2% year over year to $628.7 million.
Operating return on equity for the first quarter was 11.1%, expanding 60 bps year over year.
Total benefits and expenses decreased 17.7% year over year to $788.2 million, mainly on the back of lower insurance policy benefits, amortization and other operating costs.
Financial Update
Unrestricted cash and cash equivalents held by CNO Financial were $482 million as of Mar 31, 2020, down 16.9% from the level at 2019 end.
As of Mar 31, 2020, total assets were $32.7 billion, down 2.7% from the level at 2019 end.
Debt-to-capital was 20.8% as of Mar 31, 2020 compared with 17.5% at 2019 end.
Securities Repurchase and Divided Update
In the first quarter, the company returned $99.2 million in the form of share buybacks and dividend.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -12.12% due to these changes.
VGM Scores
Currently, CNO has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, CNO has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.