Lincoln National Corp. (NYSE:LNC) is scheduled to report second-quarter 2019 results on Jul 31.
The Zacks Consensus Estimate for earnings per share is pegged at $2.33, indicating 15.4% increase from the year-ago reported figure. Revenues are expected to be $4.53 billion, implying an increase of 12.7% from the year-ago reported figure.
Q2 Earnings Catalysts
The company’s Annuities segment is expected to benefit from increase in sales led by the broadening of its product portfolio and participation in more segments of the marketplace as well as expansion of distribution network.
In Retirement Plan Services segment, total deposits should increase from growth in both first-year sales and recurring deposits. Investments in high-touch and high-tech digitally-focused business models are leading to better outcomes for both plan sponsors and plan participants. This is resulting in sales growth, increase in employee contributions and excellent retention in the small, mid and large markets, and the same expected in the second quarter.
In the Life Insurance business, we expect increase in sales from growth in Executive Benefits, Term, Individual Universal Life (IUL) and Universal Life sales. The company continues to focus on penetrating into faster-growing segments of the marketplace where it is underrepresented, including Term and IUL. The Life business got off to a great start this year and the outlook remains solid as the company expects sales momentum to continue with strong bottom-line results.
Group Protection business is likely to see an increase in earnings from the acquisition of Liberty Mutual group benefits business. The Liberty acquisition has broadened Lincoln National’s customer base and distribution access, and increased the percentage of earnings from traditional insurance risks.
We expect an improvement in expense ratio driven by the company’s efficiency programs, through process redesign and expansion of digital capabilities.
Lincoln National boasts a disciplined capital management strategy, which includes share buyback, dividend payouts, and selective acquisitions.
Therefore, the bottom line should gain from share repurchases made by the company in the second quarter.
Earnings Surprise
The company boasts an attractive earnings surprise history. It beat estimates in three out of the trailing four quarters, delivering an average positive surprise of 1.96%
Lincoln National Corporation Price and EPS Surprise
Here is what our quantitative model predicts:
Our proven model conclusively shows that Lincoln National is likely to beat estimates this earnings season. This is because it has the right combination of a positive Earnings ESP and a top Zacks Rank.
Earnings ESP: Lincoln National has an Earnings ESP of +0.71%. This is because the Most Accurate Estimate of $2.34 per share is pegged higher than the Zacks Consensus Estimate of $2.33 per share. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Lincoln National carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP.
Other Stocks That Warrant a Look
Here are some other companies that you may consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:
NMI Holdings, Inc. NMIH has an Earnings ESP of +0.46% and a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Financial Group, Inc. AFG has an Earnings ESP of +0.66% and a Zacks Rank #3.
Alleghany Corp. Y has an Earnings ESP of +1.74% and a Zacks Rank #3.
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Lincoln National Corporation (LNC): Free Stock Analysis Report
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