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CNO (CNO) Down 4.1% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for CNO Financial (CNO - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CNO 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 Q2 Earnings Miss on Higher Expenses
CNO Financial reported second-quarter 2023 adjusted earnings per share (EPS) of 54 cents, which missed the Zacks Consensus Estimate by 21.7%. Also, the bottom line dropped 36.5% year over year.
Total revenues jumped 19.6% year over year to $1,022 million in the second quarter. The top line beat the consensus mark by 11.8%.
The weak quarterly earnings were caused by a massive increase in benefits and expenses, partially offset by improved insurance policy income and increased net investment income.
Quarterly Performance
Insurance policy income of $628.3 million rose 0.4% year over year and beat our estimate by 1.3%.
CNO’s net investment income increased 78.5% year over year to $399.7 million in the second quarter.
Annuity collected premiums of $401.8 million declined 8% year over year. New annualized premiums for health and life products advanced 11% year over year to $98.7 million.
Total benefits and expenses were $926.7 million, which jumped 66.9% year over year in the second quarter. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Jun 30, 2023)
CNO Financial exited the second quarter with unrestricted cash and cash equivalents of $457.7 million, which declined from the 2022-end level of $575.7 million.
Total assets of $34,053.9 million rose from $33,133.1 million at 2022-end.
Total shareholders’ equity jumped to $1,995.8 million from $1,768.8 million as of Dec 31, 2022.
Book value per diluted share declined to $17.31 in the second quarter from $18.31 a year ago.
Adjusted operating return on equity came in at 8%, which deteriorated 530 basis points year over year.
The debt-to-capital ratio was 36.3% at the second-quarter end.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $47 million in the form of share buybacks worth $30 million and dividends of $17 million.
As of Jun 30, 2023, the company had remaining repurchase funds of $115.6 million.
2023 Guidance
CNO Financial expects 2023 EPS in the range of $2.65-$2.85, indicating a decline from the 2022 figure of $3.06.
The company expects the expense ratio to be in the range of 19-19.4% for 2023. It also expects expenses to decline in the coming quarters.
CNO anticipates the effective tax rate for the year to be between 23% and 24%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, CNO 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 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.
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.
Performance of an Industry Player
CNO is part of the Zacks Insurance - Multi line industry. Over the past month, Everest Group (EG - Free Report) , a stock from the same industry, has gained 0.2%. The company reported its results for the quarter ended June 2023 more than a month ago.
Everest Group reported revenues of $3.65 billion in the last reported quarter, representing a year-over-year change of +18.7%. EPS of $15.21 for the same period compares with $9.79 a year ago.
For the current quarter, Everest Group is expected to post earnings of $6.60 per share, indicating a change of +225% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Everest Group. Also, the stock has a VGM Score of A.
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CNO (CNO) Down 4.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for CNO Financial (CNO - Free Report) . Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CNO 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 Q2 Earnings Miss on Higher Expenses
CNO Financial reported second-quarter 2023 adjusted earnings per share (EPS) of 54 cents, which missed the Zacks Consensus Estimate by 21.7%. Also, the bottom line dropped 36.5% year over year.
Total revenues jumped 19.6% year over year to $1,022 million in the second quarter. The top line beat the consensus mark by 11.8%.
The weak quarterly earnings were caused by a massive increase in benefits and expenses, partially offset by improved insurance policy income and increased net investment income.
Quarterly Performance
Insurance policy income of $628.3 million rose 0.4% year over year and beat our estimate by 1.3%.
CNO’s net investment income increased 78.5% year over year to $399.7 million in the second quarter.
Annuity collected premiums of $401.8 million declined 8% year over year. New annualized premiums for health and life products advanced 11% year over year to $98.7 million.
Total benefits and expenses were $926.7 million, which jumped 66.9% year over year in the second quarter. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Jun 30, 2023)
CNO Financial exited the second quarter with unrestricted cash and cash equivalents of $457.7 million, which declined from the 2022-end level of $575.7 million.
Total assets of $34,053.9 million rose from $33,133.1 million at 2022-end.
Total shareholders’ equity jumped to $1,995.8 million from $1,768.8 million as of Dec 31, 2022.
Book value per diluted share declined to $17.31 in the second quarter from $18.31 a year ago.
Adjusted operating return on equity came in at 8%, which deteriorated 530 basis points year over year.
The debt-to-capital ratio was 36.3% at the second-quarter end.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $47 million in the form of share buybacks worth $30 million and dividends of $17 million.
As of Jun 30, 2023, the company had remaining repurchase funds of $115.6 million.
2023 Guidance
CNO Financial expects 2023 EPS in the range of $2.65-$2.85, indicating a decline from the 2022 figure of $3.06.
The company expects the expense ratio to be in the range of 19-19.4% for 2023. It also expects expenses to decline in the coming quarters.
CNO anticipates the effective tax rate for the year to be between 23% and 24%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, CNO 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 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.
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.
Performance of an Industry Player
CNO is part of the Zacks Insurance - Multi line industry. Over the past month, Everest Group (EG - Free Report) , a stock from the same industry, has gained 0.2%. The company reported its results for the quarter ended June 2023 more than a month ago.
Everest Group reported revenues of $3.65 billion in the last reported quarter, representing a year-over-year change of +18.7%. EPS of $15.21 for the same period compares with $9.79 a year ago.
For the current quarter, Everest Group is expected to post earnings of $6.60 per share, indicating a change of +225% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Everest Group. Also, the stock has a VGM Score of A.