) operating earnings of 91 cents per share in the second quarter
surpassed the Zacks Consensus Estimate by 4.6%. This marks the
ninth straight quarter of positive surprise. Earnings improved
14.6% year over year.
Better performance by the core business along with a lower share
count due to continued share repurchases largely drove the upside.
Unum Group - Earnings Surprise |
Including net realized investment gain of 7 cents per share and
costs related to the early retirement of debt, Unum reported net
income of 94 cents in the quarter, up 14.6% year over year.
Total revenue of Unum Group improved 1.5% year over year to $2.6
billion. The top line was almost in line the Zacks Consensus
Share price of Unum Group gained 2.9% in the after-market session
following its earnings strength.
Quarterly Segment Update
.: Premium income in the quarter was $1.2 billion, up 2.3% year
over year. Operating income was $218.8 million, up 2.2% year over
: Premium income increased 11.9% year over year to $154 million. In
local currency, the income decreased 2.1% year over year to £91.5
Operating income was $39.6 million, down 18.2% year over year. In
local currency, the figure came in at £23.6 million, up 8.3% year
Benefit ratio was 74%, down 1,020 basis points (bps) from 84.2% in
the year-ago quarter. The lower benefit ratio is reflects favorable
risk experience in both group disability and group life.
: Premium income increased 2.9% year over year to $316.8 million
driven by consistent growth in the in-force block of business
attributable to new sales growth and stability. Operating income
improved 5.9% to $75.3 million.
Benefit ratio improved 10 bps year over year to 52% as favorable
risk results in the cancer and critical illness lines offset higher
benefit ratios in the life and accident, sickness and disability
lines of business.
: Premium income fell 4.2% from the year-ago quarter. The decline
was due to the expected run-off of the individual disability
Operating income came in at $37.3 million, up 26% year over year.
: The segment reported an operating loss of $49 million versus the
year-ago loss of $37.1 million. Increase in net investment income
on a higher level of invested assets aided the improvement.
As of Jun 30, 2014, the weighted average risk-based capital for
Unum's traditional U.S. insurance companies was nearly 401%, down
from 405% as of 2013 end. Unum exited the quarter with cash and
marketable securities of $616 million, improving 19.8% from $514
million at 2013 end.
During the second quarter, Unum repurchased 2.9 million shares for
Book value per share of Unum increased 14.1% year over year to
$36.28 as of Jun 30, 2014.
2014 Guidance Reiterated
Unum expects 2014 operating earnings to grow in the range of 5-10%
over the 2013 level.
Unum presently carries a Zacks Rank #3 (Hold).
Performance of other Insurers
While Aflac Inc. (
) and Reinsurance Group of America Inc. (
) outperformed the Zacks Consensus Estimate, Genworth Financial
) missed the same in the second quarter.
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