We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lincoln National (LNC) Q4 Earnings Miss, Revenues Decrease
Read MoreHide Full Article
Lincoln National Corporation (LNC - Free Report) reported fourth-quarter 2022 adjusted profit of 97 cents per share, missing the Zacks Consensus Estimate of $1.89 by 0.9%. The bottom line also declined from earnings of $1.56 per share in the prior-year quarter.
Adjusted operating revenues amounted to $4,676 million, which dropped 2% year over year. Yet, the top line beat the consensus mark by 3.4%.
In the fourth quarter, profits suffered a blow from an unfavorable item related to legal expenses. Quarterly results were also affected by unfavorable equity markets, hampering Annuities and Retirement Plan Services results. However, reduced pandemic-linked claims of the Group Protection Segment and lower overall costs and expenses partially offset the downside.
Costs and Expenses
Lincoln National’s expenses of $4,231 million decreased 3.1% year over year in the quarter under review, primarily due to lower costs related to benefits. Benefits account for 46.9% of the quarter’s total expenses.
Lincoln National Corporation Price, Consensus and EPS Surprise
The Annuities segment’s operating income plunged 28% year over year to $238 million in the fourth quarter due to unfavorable equity markets lowering account values. Operating revenues fell 7.2% year over year to $1,190 million but beat the consensus mark by 1.1%. Total annuity deposits of $3,210 million grew 6.6% year over year, thanks to sales growth in fixed and indexed variable annuities, which offset the lower traditional variable annuities.
Operating income in the Retirement Plan Services segment amounted to $49 million, which tumbled 14% year over year, mainly due to lower equity markets partially offset by higher spread income. The figure came lower than the consensus mark of $55 million.Operating revenues of $324 million decreased 3.3% year over year but beat the consensus mark of $318 million. Total deposits deteriorated 7.4% year over year to $2,777 million in the quarter under review due to a decrease in first-year sales and recurring deposits.
The Life Insurance segment recorded an operating profit of $46 million in the fourth quarter compared to the prior-year quarter’s operating income of $80 million. Lower returns from the insurer’s alternative investment portfolio were one of the factors hampering the performance of the segment. Operating revenues plunged 4.1% year over year to $1.769 million but beat the Zacks Consensus Estimate by 8.9%. Total Life Insurance sales of $186 million decreased 27% year over year on the back of lower universal life insurance, term life insurance, executive benefits and money guard-linked benefit products. Total deposits of $1,575 million decreased 15.9% year over year.
The Group Protection segment reported an operating income of $47 million in the fourth quarter against the prior-year quarter’s loss of $115 million. This significant growth came from reduced pandemic-linked claims and improved disability results.Operating revenues of $1,344 million improved 7.3% year over year and beat the consensus mark by 2.8%. Insurance premiums advanced 8.6% year over year to $1,213 million. Total sales in the segment plunged 7.5% year over year to $356 million.
Other Operations reported a loss of $210 million, which widened year over year from $68 million in fourth-quarter 2021.
Financial Update (as of Dec 31, 2022)
Lincoln National exited December 2022 with cash and invested cash of $3,343 million, which increased from $2,612 million at 2021-end. Total assets of $335.4 billion fell from $387.3 billion at 2021-end.
Long-term debt amounted to $5,955 million, which decreased from $6,561 million as of December 2021. It had short-term debt of $500 million at the fourth-quarter end. As of Feb 8, 2022, its senior debt received ‘BBB+’ ratings from Standard & Poor’s and Fitch.
Shareholders’ equity of $4,101 million plunged from $20,272 million at 2021-end.
Book value per share, excluding accumulated other comprehensive income (AOCI), decreased 18.3% year over year to $63.7. Adjusted operating return on equity, excluding AOCI, came in at a positive figure of 6% during the fourth quarter.
Full-Year Highlights
Adjusted operating revenue was $18,665 million, down 5% from 2021. Adjusted operating loss per share was $5.22 per share against the year-ago income of $8.20.
Capital Deployment Update
Lincoln National returned $76 million to its shareholders in the fourth quarter through common dividend payments.
Zacks Rank
Lincoln National currently carries a Zacks Rank #5 (Strong Sell).
Some of the insurance industry players like Reinsurance Group (RGA - Free Report) , Voya Financial (VOYA - Free Report) and Sun Life Financial (SLF - Free Report) have also reported fourth-quarter results so far. Let’s see how they have performed.
Reinsurance Group reported fourth-quarter 2022 adjusted operating income of $2.99 per share, which missed the Zacks Consensus Estimate by 14.8%. RGA had reported an operating loss of 56 cents per share in the prior-year quarter.
Voya Financial reported fourth-quarter 2022 adjusted operating income of $2.18 per share, beating the Zacks Consensus Estimate by 42.5%. VOYA’s bottom line increased 14.7% year over year. Adjusted operating revenues amounted to $1.5 billion.
Sun Life Financial reported fourth-quarter 2022 adjusted operating income of $1.25 per share, beating the Zacks Consensus Estimate by 7.8%. The bottom line increased 3.3% year over year. The underlying net income of $729 million (C$990 million) was up 10% year over year, which was driven by earnings growth in the United States and Canada.Insurance sales increased 14.8% year over year to $1.3 billion (C$1.8 billion), driven by increased sales in Canada, Asia and the United States. Wealth sales were $33.6 billion (C$45.6 billion), down 17% year over year. The value of the new business decreased 5.3% to $345 million (C$468 million).
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Lincoln National (LNC) Q4 Earnings Miss, Revenues Decrease
Lincoln National Corporation (LNC - Free Report) reported fourth-quarter 2022 adjusted profit of 97 cents per share, missing the Zacks Consensus Estimate of $1.89 by 0.9%. The bottom line also declined from earnings of $1.56 per share in the prior-year quarter.
Adjusted operating revenues amounted to $4,676 million, which dropped 2% year over year. Yet, the top line beat the consensus mark by 3.4%.
In the fourth quarter, profits suffered a blow from an unfavorable item related to legal expenses. Quarterly results were also affected by unfavorable equity markets, hampering Annuities and Retirement Plan Services results. However, reduced pandemic-linked claims of the Group Protection Segment and lower overall costs and expenses partially offset the downside.
Costs and Expenses
Lincoln National’s expenses of $4,231 million decreased 3.1% year over year in the quarter under review, primarily due to lower costs related to benefits. Benefits account for 46.9% of the quarter’s total expenses.
Lincoln National Corporation Price, Consensus and EPS Surprise
Lincoln National Corporation price-consensus-eps-surprise-chart | Lincoln National Corporation Quote
Segmental Update
The Annuities segment’s operating income plunged 28% year over year to $238 million in the fourth quarter due to unfavorable equity markets lowering account values. Operating revenues fell 7.2% year over year to $1,190 million but beat the consensus mark by 1.1%. Total annuity deposits of $3,210 million grew 6.6% year over year, thanks to sales growth in fixed and indexed variable annuities, which offset the lower traditional variable annuities.
Operating income in the Retirement Plan Services segment amounted to $49 million, which tumbled 14% year over year, mainly due to lower equity markets partially offset by higher spread income. The figure came lower than the consensus mark of $55 million.Operating revenues of $324 million decreased 3.3% year over year but beat the consensus mark of $318 million. Total deposits deteriorated 7.4% year over year to $2,777 million in the quarter under review due to a decrease in first-year sales and recurring deposits.
The Life Insurance segment recorded an operating profit of $46 million in the fourth quarter compared to the prior-year quarter’s operating income of $80 million. Lower returns from the insurer’s alternative investment portfolio were one of the factors hampering the performance of the segment. Operating revenues plunged 4.1% year over year to $1.769 million but beat the Zacks Consensus Estimate by 8.9%. Total Life Insurance sales of $186 million decreased 27% year over year on the back of lower universal life insurance, term life insurance, executive benefits and money guard-linked benefit products. Total deposits of $1,575 million decreased 15.9% year over year.
The Group Protection segment reported an operating income of $47 million in the fourth quarter against the prior-year quarter’s loss of $115 million. This significant growth came from reduced pandemic-linked claims and improved disability results.Operating revenues of $1,344 million improved 7.3% year over year and beat the consensus mark by 2.8%. Insurance premiums advanced 8.6% year over year to $1,213 million. Total sales in the segment plunged 7.5% year over year to $356 million.
Other Operations reported a loss of $210 million, which widened year over year from $68 million in fourth-quarter 2021.
Financial Update (as of Dec 31, 2022)
Lincoln National exited December 2022 with cash and invested cash of $3,343 million, which increased from $2,612 million at 2021-end. Total assets of $335.4 billion fell from $387.3 billion at 2021-end.
Long-term debt amounted to $5,955 million, which decreased from $6,561 million as of December 2021. It had short-term debt of $500 million at the fourth-quarter end. As of Feb 8, 2022, its senior debt received ‘BBB+’ ratings from Standard & Poor’s and Fitch.
Shareholders’ equity of $4,101 million plunged from $20,272 million at 2021-end.
Book value per share, excluding accumulated other comprehensive income (AOCI), decreased 18.3% year over year to $63.7. Adjusted operating return on equity, excluding AOCI, came in at a positive figure of 6% during the fourth quarter.
Full-Year Highlights
Adjusted operating revenue was $18,665 million, down 5% from 2021. Adjusted operating loss per share was $5.22 per share against the year-ago income of $8.20.
Capital Deployment Update
Lincoln National returned $76 million to its shareholders in the fourth quarter through common dividend payments.
Zacks Rank
Lincoln National currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other Life Insurers
Some of the insurance industry players like Reinsurance Group (RGA - Free Report) , Voya Financial (VOYA - Free Report) and Sun Life Financial (SLF - Free Report) have also reported fourth-quarter results so far. Let’s see how they have performed.
Reinsurance Group reported fourth-quarter 2022 adjusted operating income of $2.99 per share, which missed the Zacks Consensus Estimate by 14.8%. RGA had reported an operating loss of 56 cents per share in the prior-year quarter.
Voya Financial reported fourth-quarter 2022 adjusted operating income of $2.18 per share, beating the Zacks Consensus Estimate by 42.5%. VOYA’s bottom line increased 14.7% year over year. Adjusted operating revenues amounted to $1.5 billion.
Sun Life Financial reported fourth-quarter 2022 adjusted operating income of $1.25 per share, beating the Zacks Consensus Estimate by 7.8%. The bottom line increased 3.3% year over year. The underlying net income of $729 million (C$990 million) was up 10% year over year, which was driven by earnings growth in the United States and Canada.Insurance sales increased 14.8% year over year to $1.3 billion (C$1.8 billion), driven by increased sales in Canada, Asia and the United States. Wealth sales were $33.6 billion (C$45.6 billion), down 17% year over year. The value of the new business decreased 5.3% to $345 million (C$468 million).