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CNO Financial Q4 Earnings Beat on Low Costs, Improve Y/Y

CNO Financial Group, Inc. 's CNO fourth-quarter 2015 net operating earnings of 38 cents per share beat the Zacks Consensus Estimate by 2.7%. The bottom line also improved 11.8% year over year.

CNO Financial Group Inc. (CNO) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

The improvement was attributable to lower expenses and robust segmental performances at the Bankers Life, Washington National as well as Colonial Penn.

Including the impact of one time items, CNO Financial reported net income of 73 cents per share compared with 41 cents in the year-ago quarter.

CNO Financial's fourth-quarter revenues were $969.6 million, down 3% year over year. The top line also missed the Zacks Consensus Estimate of $983 million by 1.4%.

Total new annualized premiums decreased 3% year over year to $111 million. Moreover, collected premiums slightly declined to $884.1 million.

Total benefits and expenses declined 12.4% year over year to $809.3 million.

Full-year 2015 Highlights

CNO Financial's full-year net operating earnings increased 11% year over year to $1.41 per share.

Total revenues for 2015 decreased 8% year over year to $3.8 billion.

Segment Update

Pretax operating earnings at the Bankers Life segment grew 17% year over year to $121.2 million in the reported quarter.

Washington National's pretax operating earnings soared 60% year over year to $32.3 million in the quarter. Favorable adjustments with regard to the comprehensive annual actuarial reviews in the prior-year quarter drove the upside.

Pretax operating earnings at Colonial Penn were $6.7 million, which surged 139.3% from the year-ago earnings of $2.8 million. The improvement can be attributed to growth in both the block and improved marketing efficiencies.

The Corporate Operations segment includes investment advisory subsidiary and corporate expenses. Pre-tax operating loss in this segment was $0.7 million, narrower than the year-ago loss of $8.8 million. Lower expenses and more favorable investment returns in the reported quarter led to the improvement.

Financial Update

As of Dec 31, 2015, the consolidated statutory risk-based capital ratio of CNO Financial was 449%. This reflects statutory operating earnings of $350 million and dividend of $265.7 million paid to the holding company in 2015.

Additionally, unrestricted cash and investments of CNO Financial's holding company was $382 million as of Dec 31, 2015, up 10.7% from $345 million as of Dec 31, 2014. This included a portion of the proceeds from the debt refinancing transactions.

As of Dec 31, 2015, CNO Financial's debt-to-total capital ratio, excluding accumulated other comprehensive income (loss), deteriorated 280 basis points from the 2014-end figure to 19.6%. Book value per common share, excluding accumulated other comprehensive income (loss), increased 6.9% to $20.05 as of Dec 31, 2015 from $18.75 as of Dec 31, 2014.

As of Dec 31, 2015, CNO Financial had total assets worth $31.1 billion, down 0.1% from $31.2 billion as of Dec 31, 2014. Shareholder equity of $4.1 billion decreased 11.7% from $4.7 billion as of Dec 31, 2014.

Securities Repurchase Update

CNO Financial spent $365.2 million to buyback 20.6 million shares. The company intends to spend $275-$375 million toward share repurchases in 2016. As of Dec 31, 2015, CNO Financial had 184 million shares under its current authorization along with the authority to buyback shares up to another $455.7 million.

Dividend Update

CNO Financial spent $52 million as dividend payment in 2015.

Zacks Rank and Performance of Other Multiline Insurers

CNO Financial currently carries a Zacks Rank #3 (Hold). The fourth-quarter 2015 operating earnings per share of MGIC Investment Corp. MTG and The Hartford Financial Services Group, Inc. HIG beat their respective Zacks Consensus Estimates, while that of Assurant Inc. AIZ missed the same.

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ASSURANT INC (AIZ): Free Stock Analysis Report

HARTFORD FIN SV (HIG): Free Stock Analysis Report

MGIC INVSTMT CP (MTG): Free Stock Analysis Report

CNO FINL GRP (CNO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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