What's in Store for Unum Group (UNM) This Earnings Season?
Unum Group UNM is slated to report third-quarter 2020 results on Oct 27, after market close. The company delivered an earnings surprise of 3.36% in the last reported quarter.
Factors to Note
Lower premium income and weak investment income are likely to get reflected in Unum’s third-quarter results. The Zacks Consensus Estimate for third-quarter premium income is pegged at $2.3 billion, suggesting a decline of 0.04% from the prior-year quarter. The company expects further disruption in sales activity, persistency and ultimately premium income due to the uncertainty caused by the COVID-19 pandemic.
Lower interest rate environment and fluctuations in miscellaneous investment income are likely to have impacted the company’s net investment income in the to-be-reported quarter.
The Unum U.S. segment might have witnessed higher claims incidence in the group life product line due to the impacts of COVID-19. The Zacks Consensus Estimate for third-quarter premium income at the Unum U.S. segment is pegged at $1.5 billion, suggesting a decline of 0.2% from the prior-year quarter.
Colonial Life segment’s top line growth is likely to have been affected by the pandemic. Sales in the third quarter are likely to have been under pressure. Nevertheless, the Colonial Life segment may have benefited from improved premium income on the back of growth in inforce block. The Zacks Consensus Estimate for third-quarter premium income at the Colonial Life segment is pegged at $426 million, indicating an improvement of 1.4% from the prior-year quarter.
COVID-19, ongoing Brexit negotiations, uncertainty in the U.K. economy and the low interest rate environment are likely to have affected Unum International segment’s performance in the to-be-reported quarter.
Expenses are likely to have increased due to higher interest and debt expense, compensation and other expenses.
The Zacks Consensus Estimate for earnings per share is pegged at $1.30, indicating a decline of 4.4% from the year-ago reported figure.
Quantitative Model Predicts
Our proven model predicts an earnings beat for Unum 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.
Earnings ESP: Unum has an Earnings ESP of +1.35%. This is because the Most Accurate Estimate of $1.32 is pegged higher than the Zacks Consensus Estimate of $1.30. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Unum Group Price and EPS Surprise
Zacks Rank: Unum carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some stocks worth considering from the insurance space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:
Aflac AFL has an Earnings ESP of +3.46% and a Zacks Rank #3.
Voya Financial VOYA has an Earnings ESP of +3.75% and a Zacks Rank of 3, at present.
Manulife Financial MFC has an Earnings ESP of +3.85% and a Zacks Rank #3.
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