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Can Rate Hikes Aid Lincoln National (LNC) in Q4 Earnings?
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Lincoln National Corporation (LNC - Free Report) is slated to release fourth-quarter 2023 results on Feb 8, 2024, before the opening bell.
Q4 Estimates
The Zacks Consensus Estimate for LNC’s fourth-quarter 2023 earnings per share is pegged at $1.32, which indicates an improvement of 36.1% from the prior-year quarter’s reported figure.
The consensus mark for revenues is pinned at $4.4 billion, indicating a 5.1% decline from the year-ago quarter’s level.
Earnings Surprise History
Lincoln National’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, delivering an average negative surprise of 32.10%. This is depicted in the chart below:
Lincoln National Corporation Price and EPS Surprise
Our proven model predicts an earnings beat for Lincoln National this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Lincoln National has an Earnings ESP of +5.95% because the Most Accurate Estimate of $1.39 is pegged higher than the Zacks Consensus Estimate of $1.32. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: LNC carries a Zacks Rank of 3 at present.
Factors to Note
Lincoln National’s top line is likely to have benefited from expanding sales across its Group Protection and Retirement Plan Services segments in the fourth quarter. Expanding premiums resulting from prudent price increases, strong customer relationships and sound persistency rates are likely to have aided the Group Protection unit’s performance.
The Zacks Consensus Estimate for Group Protection's revenues is pegged at $1.4 billion, implying a 4% increase from the year-ago quarter’s reported figure. The consensus mark for the segment’s after-tax income from operations indicates 5% growth from the year-ago quarter’s reported number.
The Retirement Plan Services unit is expected to have been aided by growth in recurring deposits, strong client retention rates and an increase in base spreads in the to-be-reported quarter. However, an elevated expense level and higher stable value outflows are expected to have dampened the segment’s performance.
The Zacks Consensus Estimate for fourth-quarter Retirement Plan Services revenues is pinned at $331 million, implying 2.2% growth from the year-ago quarter’s reported figure. The consensus mark for the segment’s after-tax income from operations indicates a 7.9% decline from the year-ago quarter’s reported number.
However, LNC’s overall revenues are expected to have suffered a blow due to softer contributions from the Annuities and Life Insurance segments. The performance of the Annuities unit is likely to have been hurt by increased costs and higher variable annuity outflows. Nevertheless, growing sales as a result of product enhancements in the fixed annuities business are likely to have acted as a partial offset to the segment’s performance in the to-be-reported quarter.
The Zacks Consensus Estimate for revenues in the Annuities unit is pegged at $1.1 billion, which indicates a 6.7% decline from the year-ago quarter’s reported figure. The consensus mark for the segment’s after-tax income from operations suggests a 9.7% rise from the year-ago quarter’s reported number.
The decline in sales and continued incidence of mortality claims are likely to have dampened the fourth-quarter results of the Life Insurance business in the to-be-reported quarter. The Zacks Consensus Estimate for the unit’s revenues is $1.4 billion, implying a 20% decline from the year-ago quarter’s reported figure.
A decline in net investment income due to lower alternative investment income is likely to have weighed on the overall revenues of Lincoln National in the fourth quarter. The consensus mark for net investment income suggests a 5.5% fall from the year-ago quarter’s reported figure.
Additionally, LNC’s margins are likely to have taken a hit from an elevated expense level resulting from inflationary pressures, advisory and consultant expenses, and deferred maintenance costs.
Other Stocks to Consider
Here are some other companies from the insurance space, which according to our model, also have the right combination of elements to beat on earnings this time around.
The Zacks Consensus Estimate for MFC’s fourth-quarter 2023 earnings is pegged at 63 cents per share, indicating a decline of 3.1% from the year-ago quarter’s reported number.
Manulife Financial’s earnings beat estimates in each of the trailing four quarters, the average surprise being 6.66%.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for PRI’s fourth-quarter 2023 earnings is pegged at $4.26 per share, which implies a 22.1% rise from the year-ago quarter’s reported figure.
Primerica’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.84%.
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for ACGL’s fourth-quarter 2023 earnings is pegged at $1.94 per share, which indicates a decline of 9.4% from the year-ago quarter’s reported figure.
Arch Capital’s earnings beat estimates in each of the trailing four quarters, the average surprise being 35.16%.
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Can Rate Hikes Aid Lincoln National (LNC) in Q4 Earnings?
Lincoln National Corporation (LNC - Free Report) is slated to release fourth-quarter 2023 results on Feb 8, 2024, before the opening bell.
Q4 Estimates
The Zacks Consensus Estimate for LNC’s fourth-quarter 2023 earnings per share is pegged at $1.32, which indicates an improvement of 36.1% from the prior-year quarter’s reported figure.
The consensus mark for revenues is pinned at $4.4 billion, indicating a 5.1% decline from the year-ago quarter’s level.
Earnings Surprise History
Lincoln National’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, delivering an average negative surprise of 32.10%. This is depicted in the chart below:
Lincoln National Corporation Price and EPS Surprise
Lincoln National Corporation price-eps-surprise | Lincoln National Corporation Quote
What Our Quantitative Model Unveils
Our proven model predicts an earnings beat for Lincoln National this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Lincoln National has an Earnings ESP of +5.95% because the Most Accurate Estimate of $1.39 is pegged higher than the Zacks Consensus Estimate of $1.32. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: LNC carries a Zacks Rank of 3 at present.
Factors to Note
Lincoln National’s top line is likely to have benefited from expanding sales across its Group Protection and Retirement Plan Services segments in the fourth quarter. Expanding premiums resulting from prudent price increases, strong customer relationships and sound persistency rates are likely to have aided the Group Protection unit’s performance.
The Zacks Consensus Estimate for Group Protection's revenues is pegged at $1.4 billion, implying a 4% increase from the year-ago quarter’s reported figure. The consensus mark for the segment’s after-tax income from operations indicates 5% growth from the year-ago quarter’s reported number.
The Retirement Plan Services unit is expected to have been aided by growth in recurring deposits, strong client retention rates and an increase in base spreads in the to-be-reported quarter. However, an elevated expense level and higher stable value outflows are expected to have dampened the segment’s performance.
The Zacks Consensus Estimate for fourth-quarter Retirement Plan Services revenues is pinned at $331 million, implying 2.2% growth from the year-ago quarter’s reported figure. The consensus mark for the segment’s after-tax income from operations indicates a 7.9% decline from the year-ago quarter’s reported number.
However, LNC’s overall revenues are expected to have suffered a blow due to softer contributions from the Annuities and Life Insurance segments. The performance of the Annuities unit is likely to have been hurt by increased costs and higher variable annuity outflows. Nevertheless, growing sales as a result of product enhancements in the fixed annuities business are likely to have acted as a partial offset to the segment’s performance in the to-be-reported quarter.
The Zacks Consensus Estimate for revenues in the Annuities unit is pegged at $1.1 billion, which indicates a 6.7% decline from the year-ago quarter’s reported figure. The consensus mark for the segment’s after-tax income from operations suggests a 9.7% rise from the year-ago quarter’s reported number.
The decline in sales and continued incidence of mortality claims are likely to have dampened the fourth-quarter results of the Life Insurance business in the to-be-reported quarter. The Zacks Consensus Estimate for the unit’s revenues is $1.4 billion, implying a 20% decline from the year-ago quarter’s reported figure.
A decline in net investment income due to lower alternative investment income is likely to have weighed on the overall revenues of Lincoln National in the fourth quarter. The consensus mark for net investment income suggests a 5.5% fall from the year-ago quarter’s reported figure.
Additionally, LNC’s margins are likely to have taken a hit from an elevated expense level resulting from inflationary pressures, advisory and consultant expenses, and deferred maintenance costs.
Other Stocks to Consider
Here are some other companies from the insurance space, which according to our model, also have the right combination of elements to beat on earnings this time around.
Manulife Financial Corporation (MFC - Free Report) currently has an Earnings ESP of +0.80% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MFC’s fourth-quarter 2023 earnings is pegged at 63 cents per share, indicating a decline of 3.1% from the year-ago quarter’s reported number.
Manulife Financial’s earnings beat estimates in each of the trailing four quarters, the average surprise being 6.66%.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for PRI’s fourth-quarter 2023 earnings is pegged at $4.26 per share, which implies a 22.1% rise from the year-ago quarter’s reported figure.
Primerica’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.84%.
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for ACGL’s fourth-quarter 2023 earnings is pegged at $1.94 per share, which indicates a decline of 9.4% from the year-ago quarter’s reported figure.
Arch Capital’s earnings beat estimates in each of the trailing four quarters, the average surprise being 35.16%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.