Will Lincoln National (LNC) Disappoint Again In Q2 Earnings?

Lincoln National Corporation (NYSE:LNC) is scheduled to report second-quarter earnings results after market close on Aug 3.

Last quarter, this insurer missed the estimates by 15.54%. In fact, Lincoln National missed the consensus estimate in each of the past four reported quarters, with the average miss being 12.09%. Will Lincoln National miss estimates again this quarter?

Q2 Flashback

Lincoln National’s earnings suffered from low investment income and a decline in income from alternative investments.

We also expect soft Annuity sales due to equity market volatility, which dampened consumer demand for equity-sensitive products.

The company will, however, see top-line growth from an increase in sales of products without long-term guarantees, which will be partly offset by the scaling back of the sale of products with long-term guarantees. Recent new product launches and product enhancements will help in achieving greater sales in the Life segment.

In the company’s Group Protection segment we expect to see an increase in earnings driven by repricing efforts and enhancements to the claims management processes.

Share buyback will also propel the bottom line.

Earnings Whispers

Our proven model does not conclusively show that Lincoln National will beat the Zacks Consensus Estimate in this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.

Zacks ESP: Lincoln National’s Most Accurate estimate is pegged at $1.58 per share, which is above the Zacks Consensus Estimate of $1.56. The Earnings ESP is thus +1.28%.

Zacks Rank: Lincoln National has a Zacks Rank #4 (Sell), which lowers the predictive power of ESP.

Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Manulife Financial Corporation (NYSE:MFC) has an Earnings ESP of +2.94% and carries a Zacks Rank #3. The company is expected to report second-quarter earnings on Aug 4.

Prudential Financial, Inc. (NYSE:PRU) has an Earnings ESP of +0.40% and carries a Zacks Rank #3. The company is slated to report second-quarter earnings results on Aug 3.

Sun Life Financial Inc. (TO:SLF) has an Earnings ESP of +1.47% and carries a Zacks Rank #2. The company is expected to report second-quarter earnings results on Aug 10.