Lincoln National Corporation’s (NYSE:LNC) first-quarter 2018 earnings of $1.97 per share surpassed the Zacks Consensus Estimate by 1.6%. Also, the bottom line increased about 3% year over year, led by higher fee income.
Operating revenues of $3.61 billion increased 3.1% year over year but missed the Zacks Consensus Estimate by 3.65%.
Insurance premium decreased 3.7% year over year to $777 million, fee income increased 7.5% to $1.46 billion.
Lincoln National Corporation Price, Consensus and EPS Surprise
Total expenses increased 4.9% to $3.17 billion year over year, mainly led by higher strategic digitization expense and interest and debt expense.
Strong Segment Results
Operating income in the Annuities segment decreased 5% year over year to $267 million. The year-ago quarter benefited from one-time tax adjustments.
Total annuity deposits increased 25.3% from the year-ago quarter to $2.5 billion, driven by growth in variable annuities.
Operating income in Retirement Plan Services increased 16.2% year over year to $43 million, driven by growth in fee income and a lower tax rate. Total deposits grew 4.8% from the prior-year quarter to $2.36 billion.
Operating income in Life Insurance segment was up 10.8% year over year to $144 million due to lower tax rate and growth of policies in-force.
Operating revenues increased 3.4% year over year to $1.66 billion.
Operating income in Group Protection surged 314% from the year-ago quarter to $29 million. The upside was driven by an improvement in non-medical loss ratio. Operating revenues increased 2.2% year over year to $553 million.
Other Operations
The company incurred a loss of $58 million, wider than the loss of $31 million in the prior-year quarter.
Financial Update
As of Mar 31, 2018, Lincoln National’s book value per share, excluding accumulated other comprehensive income, climbed 7.7% year over year to $62.88.
Operating return on equity (ROE), excluding accumulated other comprehensive income and goodwill, declined 200 bps from the year-ago quarter to 14.4%.
The company ended the quarter with long-term debt of $5.65 billion, up 10.6% year over year.
Business Update
The company has completed the acquisition of Liberty Mutual’s group benefits business. The buyout is expected to create a single, powerful Group Benefits operation with industry-leading products, services and capabilities.
Zacks Rank and Other Stocks
Lincoln National carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Among the other players in the same space, the bottom line at Torchmark Corp. (NYSE:TMK) , Aflac Inc. (NYSE:AFL) and Genworth Financial Inc. (NYSE:GNW) beat their respective first-quarter estimates by 2.05%, 8.25% and 8.7%.
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Aflac Incorporated (AFL): Free Stock Analysis Report
Lincoln National Corporation (LNC): Free Stock Analysis Report
Torchmark Corporation (TMK): Free Stock Analysis Report
Genworth Financial, Inc. (GNW): Free Stock Analysis Report
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