We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
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.
Unum (UNM) Up 19.7% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Unum (UNM - Free Report) . Shares have added about 19.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Unum 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 catalysts.
Unum Group Q3 Earnings Top Estimates, Revenues & Premium Rise Y/Y
Unum Group’s third-quarter 2024 operating net income of $2.13 per share beat the Zacks Consensus Estimate by 1.9%. The bottom line increased 9.8% year over year.
The quarterly results reflected continued strong operating performance, favorable benefit experience, premium growth, increased sales in the Unum U.K. and lower expenses, offset by a soft performance in the Corporate segment.
Operational Update
Total operating revenues of Unum Group were $3.2 billion, up 3.4% year over year, driven by higher premium income, other income and improved net investment income.
Premium increased 4% from the prior-year quarter to $2.6 billion, which matched our estimate as well as the Zacks Consensus Estimate.
Total benefits and expenses decreased 15.1% year over year to $2.4 billion, largely attributable to lower policy benefits, including remeasurement loss or gain. Our estimate for the same was $2.7 billion.
Quarterly Segment Update
Unum U.S.: Premium income was $1.7 billion, up 4% year over year. Adjusted operating income rose 1.5% year over year to $363.3 million. The Zacks Consensus Estimate was pegged at $358 million. Our estimate was $424.8 million.
Unum International: Premium income of $246.6 million increased 17.1% year over year. Adjusted operating income was $40.3 million, up 9.5% year over year. The Zacks Consensus Estimate was pegged at $39.9 million. Our estimate was $31.5 million.
The Unum U.K. line of business premium income was £158.9 million, up 11.7% from the year-ago quarter due to in-force block growth. Adjusted operating income, in local currency, of £29.5 million was up 3.9% year over year.
The benefit ratio, excluding the reserve assumption updates, was 69.5%, which deteriorated 210 basis points (bps) due to higher incidence in the group long-term disability and group life product lines. It was partially offset by favorable incidence in the supplemental product line and favorable recoveries in the group long-term disability product line. Sales increased 26.9%.
For the first nine months of 2024, persistency decreased in the group long-term disability and supplemental product line but increased in the group life product line of business.
Colonial Life: Premium income increased 2.5% from the prior-year figure to $441.9 million, driven by higher prior period sales and generally stable persistency.
Sales decreased 0.3% from the year-ago figure to $120.9 million. Adjusted operating income increased 10.2% from the prior-year period to $113.4 million. Our estimate was $148.9 million, while the Zacks Consensus Estimate was pegged at $119 million.
Persistency was 78% in the first nine months of 2024, which expanded 10 bps year over year.
The benefit ratio, excluding the reserve assumption updates, improved 150 bps year over year to 47.6%, primarily due to favorable benefit experience in cancer and critical illness and life product lines.
Closed Block: Adjusted operating income was $34.2 million, which remained unchanged year over year. The adjusted operating income excludes the amortization of the cost of reinsurance of $10.4 million and the impact of non-contemporaneous reinsurance of $6 million related to the Closed Block individual disability reinsurance transaction as well as the net reserve decrease related to the assumption updates of $175.3 million. Our estimate for loss was $34.1 million, while the Zacks Consensus Estimate was pegged at a loss of $37.8 million.
Corporate: The segment incurred an adjusted operating loss of $49.4 million, which excludes the loss on legal settlement of $15.3 million, wider than the year-ago quarter’s loss of $41.5 million. The loss was due to a decrease in net investment income, owing to increased allocations to lines of business. Our estimate for loss was $45.3 million, while the Zacks Consensus Estimate was pegged at a loss of $45.1 million.
Capital Management
As of Sept. 30, 2024, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 470%.
Unum Group exited the third quarter with holding company liquidity worth $1.4 billion.
Book value per share grew 20.4% year over year to $59.36 as of Sept. 30, 2024.
UNM bought back 3.7 shares for $202 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Unum has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Unum 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
Unum belongs to the Zacks Insurance - Accident and Health industry. Another stock from the same industry, Amerisafe (AMSF - Free Report) , has gained 7.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Amerisafe reported revenues of $74.66 million in the last reported quarter, representing a year-over-year change of -0.2%. EPS of $0.58 for the same period compares with $0.61 a year ago.
For the current quarter, Amerisafe is expected to post earnings of $0.60 per share, indicating a change of -18.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Amerisafe has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Unum (UNM) Up 19.7% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Unum (UNM - Free Report) . Shares have added about 19.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Unum 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 catalysts.
Unum Group Q3 Earnings Top Estimates, Revenues & Premium Rise Y/Y
Unum Group’s third-quarter 2024 operating net income of $2.13 per share beat the Zacks Consensus Estimate by 1.9%. The bottom line increased 9.8% year over year.
The quarterly results reflected continued strong operating performance, favorable benefit experience, premium growth, increased sales in the Unum U.K. and lower expenses, offset by a soft performance in the Corporate segment.
Operational Update
Total operating revenues of Unum Group were $3.2 billion, up 3.4% year over year, driven by higher premium income, other income and improved net investment income.
Premium increased 4% from the prior-year quarter to $2.6 billion, which matched our estimate as well as the Zacks Consensus Estimate.
Total benefits and expenses decreased 15.1% year over year to $2.4 billion, largely attributable to lower policy benefits, including remeasurement loss or gain. Our estimate for the same was $2.7 billion.
Quarterly Segment Update
Unum U.S.: Premium income was $1.7 billion, up 4% year over year.
Adjusted operating income rose 1.5% year over year to $363.3 million. The Zacks Consensus Estimate was pegged at $358 million. Our estimate was $424.8 million.
Unum International: Premium income of $246.6 million increased 17.1% year over year. Adjusted operating income was $40.3 million, up 9.5% year over year. The Zacks Consensus Estimate was pegged at $39.9 million. Our estimate was $31.5 million.
The Unum U.K. line of business premium income was £158.9 million, up 11.7% from the year-ago quarter due to in-force block growth. Adjusted operating income, in local currency, of £29.5 million was up 3.9% year over year.
The benefit ratio, excluding the reserve assumption updates, was 69.5%, which deteriorated 210 basis points (bps) due to higher incidence in the group long-term disability and group life product lines. It was partially offset by favorable incidence in the supplemental product line and favorable recoveries in the group long-term disability product line. Sales increased 26.9%.
For the first nine months of 2024, persistency decreased in the group long-term disability and supplemental product line but increased in the group life product line of business.
Colonial Life: Premium income increased 2.5% from the prior-year figure to $441.9 million, driven by higher prior period sales and generally stable persistency.
Sales decreased 0.3% from the year-ago figure to $120.9 million. Adjusted operating income increased 10.2% from the prior-year period to $113.4 million. Our estimate was $148.9 million, while the Zacks Consensus Estimate was pegged at $119 million.
Persistency was 78% in the first nine months of 2024, which expanded 10 bps year over year.
The benefit ratio, excluding the reserve assumption updates, improved 150 bps year over year to 47.6%, primarily due to favorable benefit experience in cancer and critical illness and life product lines.
Closed Block: Adjusted operating income was $34.2 million, which remained unchanged year over year. The adjusted operating income excludes the amortization of the cost of reinsurance of $10.4 million and the impact of non-contemporaneous reinsurance of $6 million related to the Closed Block individual disability reinsurance transaction as well as the net reserve decrease related to the assumption updates of $175.3 million. Our estimate for loss was $34.1 million, while the Zacks Consensus Estimate was pegged at a loss of $37.8 million.
Corporate: The segment incurred an adjusted operating loss of $49.4 million, which excludes the loss on legal settlement of $15.3 million, wider than the year-ago quarter’s loss of $41.5 million. The loss was due to a decrease in net investment income, owing to increased allocations to lines of business. Our estimate for loss was $45.3 million, while the Zacks Consensus Estimate was pegged at a loss of $45.1 million.
Capital Management
As of Sept. 30, 2024, the weighted average risk-based capital ratio for Unum Group’s traditional U.S. insurance companies was approximately 470%.
Unum Group exited the third quarter with holding company liquidity worth $1.4 billion.
Book value per share grew 20.4% year over year to $59.36 as of Sept. 30, 2024.
UNM bought back 3.7 shares for $202 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Unum has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Unum 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
Unum belongs to the Zacks Insurance - Accident and Health industry. Another stock from the same industry, Amerisafe (AMSF - Free Report) , has gained 7.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Amerisafe reported revenues of $74.66 million in the last reported quarter, representing a year-over-year change of -0.2%. EPS of $0.58 for the same period compares with $0.61 a year ago.
For the current quarter, Amerisafe is expected to post earnings of $0.60 per share, indicating a change of -18.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Amerisafe has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.