CNO Financial Group Inc.
) reported third-quarter 2013 operating earnings of 33 cents per
share, surpassing the Zacks Consensus Estimate of 27 cents. The
result also surpassed 11 cents earned in the year-ago quarter.
Net operating income in the quarter was $77.2 million, up 201.6%
from $25.6 million in the third quarter of 2012.
The improvement came on the back of growth in sales across its
CNO Financial reported net income of $283 million or $1.23 per
share. The result includes net realized investment losses of $0.1
million, changes in fair value of embedded derivative liabilities
of $2.2 million, equity in earnings of certain non-strategic
investments and earnings attributable to non-controlling
interests of ($3 million), and valuation allowance for deferred
tax assets of $206.7 million in the reported quarter. The
reported net income rebounded from a year-ago net loss of $5
million or 2 cents per share.
CNO Financial's third quarter revenues stood at $1.09 billion,
almost in line with the year-ago revenues. However, total revenue
surpassed the Zacks Consensus Estimate of $1.07 billion. Total
new annualized premium increased 8.2% year over year to $101.8
million. Total benefits and expenses decreased 21.8% year over
year to $979.4 million.
Pre-tax operating earnings in the
segment increased 7% year over year to $86.3 million in the
reported quarter due to favorable reserve developments in the
Medicare supplement block and higher earnings in the annuity
business that resulted from higher account values and low
surrenders. However, this was partially offset by higher benefit
ratios in the long-term care block reflecting higher
's pre-tax operating earnings were $28.1 million in the quarter,
declining 17% from the year-ago quarter. The decline came from
higher benefit ratios in the supplemental health insurance block
reflecting lower conversion and upgrade activity for some
policies that are nearing their return of premium maturity
Pre-tax operating loss of
was $4.2 million, wider than the year ago loss of $2.6 million
due to an increase in marketing expenses.
Other CNO Business
reported pre-tax operating income of $6.1 million in the quarter,
rebounding from an operating loss of $53.6 million in the
year-ago quarter. Favorable mortality in the life block and
favorable claim experience in the long-term care block of this
segment mainly aided the improvement. The guidance for this
segment's 2013 pre-tax income stands at $5-$20 million.
, which includes investment advisory subsidiary and corporate
expenses, bounced back to a pre-tax income of $9.4 million from
pre-tax loss of $6.7 million in the year-ago quarter, based on
the impact of higher interest rates on the values of liabilities
or agent deferred compensation and former executive retirement
annuities and favorable investment results.
As of Sep 30. 2013 the consolidated statutory risk-based
capital ratio of CNO Financial's insurance subsidiaries was 392%,
up 2500 basis points year over year, reflecting statutory
earnings of $296 million and dividend of $202.5 million paid to
the holding company during the first nine months of 2013.
In addition, unrestricted cash and investments held by CNO
Financial's holding company decreased to $292 million as of Sep
30, 2013 from $294 million as of Dec 31, 2012.
As of Sep 30, 2013, CNO Financial's debt-to-total capital
ratio, excluding accumulated other comprehensive income (loss),
declined 340 basis points over 2012-end to 17.3%. Book value per
common share, excluding accumulated other comprehensive income
(loss), increased to $18.24 as of Sep 30, 2013 from $16.21 as of
Dec 31, 2012.
As of Sep 30, 2013, CNO Financial had total assets worth $33.9
billion and shareholder equity stood at $4.8 billion.
Securities Repurchase Update
CNO Financial spent $37.3 million to repurchase 2.6 million
shares in the reported quarter. This amount to a total repurchase
of shares worth $221.6 million in the first nine months of 2013.
CNO Financial expects to spend $250-$300 million on the
repurchase of securities in 2013. CNO Financial is left with 222
million shares under its current authorization and has the
authority to repurchase shares up to an additional amount of
CNO Financial spent $6.7 million on dividend payment in the
CNO Financial surpassed the Zacks Consensus Estimate as well
as year ago numbers banking on growth in its core segment sales.
Higher revenues along with a decline in expenses spurred margins
during the quarter.
Further, strong capital generation positions the company to
undertake strategic investments and focus on profit generation.
Moreover, strong cash flow and effective capital management helps
to retain investor confidence on the stock.
) third quarter earnings came in at $1.71 per share,
significantly ahead of the Zacks Consensus Estimate of $1.45 per
Horace Mann Educators Corp.
) reported its third-quarter 2013 operating net income of 59
cents per share, surpassing the Zacks Consensus Estimate of 58
cents by 1.7%.
Old Republic International Corporation
) reported its third-quarter 2013 earnings of 35 cents per share,
surpassing the Zacks Consensus Estimate of 11 cents.
CNO Financial carries a Zacks Rank #4 (Sell).
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