) reported first quarter 2013 net operating income of $1.39 per
share which breezed past the Zacks Consensus Estimate by 1.5%.
Results also improved 9.4% year over year.
Including realized losses on investments of 4 cents and Medicare
Part D adjustments of 9 cents net income for Torchmark stood at
$1.27 per share, up 8.5% year over year.
Total insurance premium increased 9% year over year to $769.2
million, led by higher premium from the Life, Health Insurance
and Medicare Part D operations.
Net investment income increased 2% year over year to $183
million. Excess investment income, a measure of the segment's
profitability, was down 13% to $55.6 million.
Underwriting income increased 10.5% year over year to $148.6
million in the reported quarter, backed by higher margins at
Life, Health and Medicare Part D segments.
Administrative expenses in the quarter increased 8.1% year over
year to $43.9 million.
At Life Insurance operations, premium revenue increased 4% year
over year to $470.8 million in the first quarter, attributable to
higher premiums written by distribution channels - American
Income Agency (up 9%) and Direct Response (up 4%), partially
offset by a 2% decline in premiums written by Liberty National
Life Agency. Life underwriting income increased 5.5% to $133.1
million. Net sales of life insurance decreased 4%.
Health Insurance premium revenue increased 23% year over year to
$221.5 million while underwriting income increased 25.5% year
over year to $49.9 million. Net sales in Health Insurance
Premium Revenue from the Medicare Part D business increased 4%
year over year to $76.7 million in the first quarter.
Underwriting income increased 2% to $8 million. Net sales of
Medicare part D insurance declined 65% year over year to $9
Return on equity (ROE) was 15.6% for the first quarter, compared
with 15.8% in the year-ago quarter.
Share Repurchase Update
During the quarter Torchmark repurchased 1.6 million shares at a
total cost of $90 million.
As of Mar 31, 2013, Torchmark had assets worth $18.9 billion, up
12.8% year over year.
Shareholders' equity as of Mar 31, 2013 increased 12.3% year over
year to $4.3 billion.
Long term debt of Torchmark increased 8.2% year over year to $990
million. The debt-to-capital ratio of Torchmark as of Mar 31,
2013 was 24%, up 9 basis points.
Book value per share increased 10% year over year to $35.98 as of
Mar 31, 2013.
Guidance for 2013
Management expects 2013 net operating income per share to range
from $5.50- $5.75.
Torchmark currently carries a Zacks Rank #3 (Hold). Among others
in the industry,
Protective Life Corporation
) with Zacks Rank #1 (Strong Buy), and
Lincoln National Corporation
Universal American Corp
) with Zacks Rank # 2 (Buy) are expected to report their first
quarter 2013 results shortly.
LINCOLN NATL-IN (LNC): Free Stock Analysis
PROTECTIVE LIFE (PL): Free Stock Analysis
TORCHMARK CORP (TMK): Free Stock Analysis
UNIVL AMERICAN (UAM): Free Stock Analysis
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