) has successfully managed to keep its positive surprise streak
alive with its first quarter 2014 earnings results. With operating
earnings of 88 cents per share surpassing the Zacks Consensus
Estimate by 2.4%, the accident and health insurer outperformed the
same for straight eight quarters. Earnings also improved nearly
8.8% year over year.
Better performances in core business largely drove the upside.
Including net realized investment gain of 1 cent per share, Unum
reported net income of 88 cents in the quarter, up 11.4% year over
Total revenue declined about 0.4% year over year to $2.60 billion.
The top line also slightly missed the Zacks Consensus Estimate of
Quarterly Segment Update
.: Premium income in the quarter was $1.15 billion, up 1.1% year
over year. Operating income was $210.8 million, up 1.3% year over
.: Premium income increased 5.5% year over year to $151.7 million.
In local currency, the income decreased 1.3% year over year to
Operating income was $36.5 million, down 16.6% year over year. In
local currency, the figure came in at £22.2 million, up 8.9% year
Benefit ratio was 70.1% in the quarter, up 60 basis points (bps)
from 69.5% in the year-ago quarter. The higher benefit ratio is
attributable to favorable risk experience in the group disability
line of business, which in turn offset lesser mortality in the
group life line.
: Premium income increased 3% year over year to $316.4
million driven by consistent growth in the active block of
business. Operating income improved 5.3% to $79.4 million.
Benefit ratio improved 200 bps year over year to 50.5% driven by
favorable risk experience across all lines of business.
: Premium income fell 6% from the year-ago quarter. The decline was
due to the expected run-off of the individual disability business.
Operating income came in at $29.1 million, up 6.6% year over year.
: The segment reported an operating loss of $34.2 million versus
the year-ago loss of $33.7 million. Lower net investment income can
be blamed for the wider loss.
As of March 31, 2014, the weighted average risk-based capital for
Unum's traditional U.S. insurance companies was nearly 400%
down from 405% as of 2013 end. Unum exited the quarter with cash
and marketable securities of $514 million, improving 60% from $514
million at 2013 end.
During the first quarter, Unum repurchased 2.9 million shares for
Book value per share of Unum increased 8.4% year over year to
$34.77 as of March 31, 2014.
2014 Guidance Reiterated
Unum expects full-year 2014 operating earnings to grow in the range
of 5-10% over the 2013 level.
Zacks Rank and Other Picks
Unum presently carries a Zacks Rank #3 (Hold). Among other accident
and health insurers,
Employers Holdings, Inc
) beat the respective Zacks Consensus Estimate in the first quarter
) missed the same.
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