American Equity Investment Life Holding Company
) reported its third-quarter 2013 operating net income of 80
cents per share, which significantly surpassed the Zacks
Consensus Estimate of 45 cents by 77.8%. The results also surged
substantially from the prior-year quarter number of 34 cents per
AMER EQUITY INV (AEL): Free Stock Analysis
GENWORTH FINL (GNW): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
PROTECTIVE LIFE (PL): Free Stock Analysis
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Top-line improvement combined with reduced expenses fueled
bottom-line growth for American Equity in the reported quarter.
Including net realized investment losses of 1 cent per share,
changes in fair value of derivatives and embedded derivatives of
3 cents per share and extinguishment of debt of 1 cent per share,
American Equity reported net income of 75 cents per share,
rebounding successfully from net loss of 13 cents per share in
the prior-year quarter.
Total revenues of American Equity amounted to $572.9 million
during the quarter, up 13.7% year over year. The top line
improved on the back of higher annuity product charges as well as
higher net investment income, partially offset by higher net
realized losses on investments.
American Equity's annuity sales were $1.05 billion, declining
7.1% year over year.
Investment spread of American Equity improved 18 basis points
year over year to 2.8%.
Total benefits and expenses for the company declined 5.6% year
over year to $487.1 million in the reported quarter. The
improvement was primarily due to lower interest expense on
subordinate debentures as well as lower other operating costs and
Total invested assets of American Equity as of Sep 30, 2013 was
As of Sep 30, estimated risk-based capital (RBC) ratio stayed
above the target at 333% compared to 332% at 2012-end.
In the third quarter American Equity issued 6.625% $400 million
senior notes due 2021. Of the proceeds, $15 million will be
deployed to pay back the entire outstanding amount under its
revolving credit facility. Another $128 million was used to pay
the cash considerations to holders of the two issues of American
Equity's convertible notes who agreed to the company's exchange
offers to retire those notes. American Equity intends to utilize
the rest of the net proceeds to repurchase $214 million of its
currently outstanding principal amount of convertible notes.
Performances of Other Insurers
Genworth Financial Inc.
) reported third-quarter 2013 net operating income of 24 cents
per share. The results fell short of the Zacks Consensus Estimate
by 4 cents but were a couple of cents above the year-ago level.
Lincoln National Corporation
) reported third-quarter 2013 operating earnings of $1.34 per
share. The results surpassed the Zacks Consensus Estimate of
$1.23 and breezed past the prior-year quarter's earnings of $1.27
Protective Life Corp.
) reported third-quarter 2013 net operating earnings of 98 cents
per share, a penny ahead of the Zacks Consensus Estimate of 97
cents per share. Earnings also surged 29% year over year.
American Equity presently carries a Zacks Rank #3 (Hold).