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Unum Group (UMN): Is it Poised to Beat on Earnings in Q3?

Unum GroupUNM is set to report third-quarter 2015 results on Oct 28 after the market closes. Last quarter, the company posted a negative 1.11% surprise. Let's see how things are shaping up for this announcement.

Factors Influencing This Past Quarter Results

Focus on shifting to a business mix with higher growth and stable margins is likely to have favored the performance at Colonial Life Segment in the to-be reported quarter. Unum U.S. is also likely be benefitted by solid persistency and sales improvement.

The top line is expected to have been driven by better sales and persistency that has been fuelling premium growth.

Benefit ratio is expected to show improvement as group disability continued to witness favorable claims recovery.

Continued share buyback that lowered the share count, will give an additional upside to the bottom line in the to-be reported quarter.

Nonetheless, a soft interest rate environment will continue to weigh on investment results. Also, results at Unum U.K. are likely to have remained soft due to a low interest rate environment despite management's efforts to improve through changes in business mix, premium rate increases, intense focus on new market sales, and capitalization of strategic opportunities.

Earnings Whispers?

Our proven model does not conclusively show that Unum Group will beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Unum Group has -2.20% Earnings ESP. This is because the Most Accurate estimate is 89 cents while the Zacks Consensus Estimate is pegged higher at 91 cents.

Zacks Rank: Unum Group carries a Zacks Rank #3 (Hold). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

Assurant Inc. AIZ , Earnings ESP of +3.27% and a Zacks Rank #2 (Buy). The company is scheduled to report third-quarter earnings results on Oct 27.

Arch Capital Group Ltd. ACGL , Earnings ESP of +1.02% and a Zacks Rank #2. The company is scheduled to report third-quarter earnings results on Oct 28.

RenaissanceRe Holdings Ltd. RNR , Earnings ESP of +3.68% and a Zacks Rank #1 (Strong Buy). The company is scheduled to report third-quarter earnings results on Nov 5.

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ASSURANT INC (AIZ): Free Stock Analysis Report

RENAISSANCERE (RNR): Free Stock Analysis Report

UNUM GROUP (UNM): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): 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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