Globe Life (GL) to Report Q3 Earnings: What's in The Cards?

Globe Life Inc. GL is slated to report third-quarter 2020 results on Oct 21, after market close. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 4.4%.

Factors to Note

The company’s life and health premiums, which have been driving its top-line growth, are likely to have increased in the third quarter, owing to the strength of policies in force and solid agent count. The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.2 billion, suggesting an improvement of 4.6% from the prior-year quarter.

With respect to liquidity, Globe Life’s insurance company operating cash flows are expected to have been strong. Higher premium collections and lower health claim payments are likely to have offset higher COVID-related claims.

Lower interest rate and reinvestment of proceeds from dispositions at lower yield rates are likely to have hurt the company’s net investment income in the to-be-reported quarter. At the midpoint of the guidance, the company expects an average new money rate of around 3.3% to 3.4%.

Furthermore, sales in the company’s distribution channels are likely to have been relatively flat or consistent in the to-be-reported quarter. However, certain distribution channels are likely to have suffered from decreased sales due to the COVID-19 pandemic.

Additionally, the underwriting margin as a percent of premium is likely to have been lower due to higher mortality as a result of the pandemic.

Administrative expenses likely have increased in the third quarter.

The Zacks Consensus Estimate for earnings per share is pegged at $1.76, indicating a decline of 1.7% from the year-ago reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Globe Life this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Globe Life has an Earnings ESP of -2.60%. This is because the Most Accurate Estimate of $1.72 is pegged lower than the Zacks Consensus Estimate of $1.76. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Globe Life Inc. Price and EPS Surprise

Globe Life Inc. Price and EPS Surprise

Globe Life Inc. price-eps-surprise | Globe Life Inc. Quote

Zacks Rank: Globe Life currently carries a Zacks Rank #3.

Stocks to Consider

Some stocks worth considering from the finance sector with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Synchrony Financial SYF has an Earnings ESP of +9.24% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Equitable Holdings, Inc. EQH has an Earnings ESP of +4.74% and a Zacks Rank #2.

Moody’s Corporation MCO has an Earnings ESP of +1.93% and a Zacks Rank of 2.

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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.

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