Lincoln National Corporation 's ( LNC ) first-quarter
2013 operating earnings of $1.02 per share lagged the Zacks
Consensus Estimate of $1.10, although it breezed past the
prior-year quarter's earnings of 99 cents a share, primarily on
lower share count.
However, operating net income dipped 2.7% year over year to $285
million. Meanwhile, reported net income, including extraordinary
items, stood at $239 million or 86 cents per share as against $243
million or 82 cents per share in the year-ago quarter.
Lincoln's total revenue climbed 4.9% over the prior-year quarter
to $2.84 billion but missed the Zacks Consensus Estimate of $2.95
billion. The year-over-year upside was driven by strong
distribution expansion along with higher premiums and fees.
Consolidated account balances increased 10% year over year to
$186 billion, while net flows surged 67% to $2.1 billion, both
reflecting growth across segments. Additionally, total deposits
spiked 19% to $6.13 million in the reported quarter. Total expenses
grew 5.7% year over year to $2.54 billion, primarily based on
Operating income from Annuities stood
at $159 million, increasing 16.1% from $137 million in the
prior-year quarter, driven by higher revenues. Even account
balances, gross deposits and net flows showcased improvement over
the prior-year quarter.
Operating income from Retirement Plan
Services was $35 million, at par with the prior-year
period, reflecting stable growth in sales, retention and account
Operating income from Life Insurance
of $112 million declined 19.4% from $139 million in the year-ago
period, although life insurance sales improved 23% year over year
to $150 million. Life insurance in force improved 2% year over year
to $594 billion, while aggregate sales of higher return products,
including indexed universal life, variable universal life and term
insurance, increased 82% over the prior-year quarter.
Operating income from Group Protection
dipped to $14 million from $16 million in the prior-year period.
Non-medical loss ratio remained flat at 74.8% from the prior
quarter. However, non-medical net earned premiums were $475
million, up 10% over the year-ago period, while Group Protection
sales of $71 million grew 6% year over year.
Operating loss in Other operations
marginally reduced to $35 million from $34 million in the year-ago
Further, net realized losses included a net loss from account
investments of $4 million compared with $6 million in the
prior-year quarter. Additionally, net realized losses included
variable annuity net derivatives loss of $34 million during the
As of Mar 31, 2013, net unrealized gain was approximately $8.7
billion (pre-tax) on its available-for-sale securities as compared
with $6.4 billion in the year-ago period.
At the end of Mar 2013, book value per share came in at $55.33,
up 20% on a year-over-year basis. Excluding accumulated other
comprehensive income (AOCI), book value climbed 14% year over year
to $42.00 per share. Operating ROE stood at 10.2% at the end of Mar
2013, down from 11.2% at both 2012-end and prior-year quarter.
Additionally, Lincoln bought back 3.2 million shares for $100
million during the reported quarter.
On Mar 1, 2012, the board of Lincoln declared its regular
quarterly dividend of 12 cents per share, which was paid on May 1,
2013 to the shareholders of record as on Apr 9, 2013.
On Nov 8, 2012, Lincoln announced a 50% hike in its regular
quarterly dividend to 12 cents per share from the previous pay-out
of 8 cents per share. The raised dividend was paid on Feb 1, 2013,
to shareholders of record as on Jan 10, 2013. This marked the third
dividend hike since 2007.
Along with Lincoln, MetLife Inc. ( MET ), American
International Group Inc. ( AIG ) and
Prudential Financial Inc. ( PRU ) carry a Zacks
Rank #2 (Buy). AMER INTL GRP (AIG): Free Stock Analysis ReportLINCOLN NATL-IN (LNC): Free Stock Analysis
ReportMETLIFE INC (MET): Free Stock Analysis ReportPRUDENTIAL FINL (PRU): Free Stock Analysis
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