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Lincoln National Q4 Earnings Miss by a Whisker, Down Y/Y

Lincoln National CorporationLNC reported fourth-quarter 2015 operating net income of $1.54 per share that missed the Zacks Consensus Estimate of $1.55 by a penny. The bottom line also deteriorated 7.8% year over year.

Lincoln National Corporation (LNC) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Including non-recurring items, Lincoln National's net income was $1.14 per share, down from $1.32 reported in the year-ago quarter.

Lincoln National's total operating revenue decreased nearly 12.5% from the year-ago quarter to $3.35 billion. Nonetheless, revenues beat the Zacks Consensus Estimate of $3.33 billion.

Full-year 2015 Highlights

Lincoln National's full-year operating earnings came in at $5.46 per share, down 9.5% year over year.

Total revenues for 2015 inched up 0.13% year over year to $13.6 billion.

Consolidated total account balances of Lincoln National rose 4% year over year to $221 billion, and net flow was up 9% to $6.0 billion in 2015.

Segment Analysis

Operating income from the Annuities segment increased 3% year over year to $243 million on the back of higher fees on assets under management along with positive net flows and lower general and administrative expenses.

Operating income from Retirement Plan Services was $33 million versus $40 million in the prior-year quarter. Total deposits were $2.1 billion, down 10% year over year. However, the segment witnessed growth from the small and mid-large markets in the reported quarter.

Operating income from Life Insurance was $119 million, much lower than $193 million in the year-ago quarter. The decline stemmed from lower alternative investment income in the reported quarter. Life insurance sales climbed 3% year over year to $198 million. Life insurance average in-force amount improved 3% year over year to $662 billion, while account values increased 4% to $43 billion.

Group Protection's operating income was $13 million. The segment had reported an operating loss of $7 million in the prior-year quarter. This upside was mainly attributable to an improved pricing environment and solid claims management. Non-medical loss ratio improved 570 basis points year over year to 75.3% owing to pricing actions and improvements in disability claims management.

Financial Update

As of Dec 31, 2015, Lincoln National's book value per share, excluding accumulated other comprehensive income, climbed 6.3% year over year to $52.38 per share. Operating return on equity was 12.0% in the fourth quarter, down from 13.9% in the year-ago period.

Share Repurchase and Dividend Update

Lincoln National spent $200 million to buy back 3.7 million shares during the reported quarter, taking full year tally to $900 million worth shares bought back in 2015.

Zacks Rank and Performance of Other Insurers

Lincoln National currently carries a Zacks Rank #3 (Hold). Other insurers too recently released their fourth-quarter earnings results. While the bottom line at The Travelers Companies, Inc. TRV and Progressive Corp. PGR beat their respective Zacks Consensus Estimates, RLI Corp. RLI missed the same in the fourth quarter.

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LINCOLN NATL-IN (LNC): Free Stock Analysis Report

RLI CORP (RLI): Free Stock Analysis Report

TRAVELERS COS (TRV): Free Stock Analysis Report

PROGRESSIVE COR (PGR): 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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