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What's in the Offing for Globe Life's (GL) Q2 Earnings?

Globe Life Inc. GL is slated to report second-quarter 2020 results on Jul 22, after the market close. The company has a trailing four-quarter earnings surprise of 0.45%, on average.

Factors to Note

The company’s life and health premiums, which have been driving its top-line growth for quite some time, might get reflected in the second-quarter results. The Zacks Consensus Estimate for second-quarter revenues is pegged at $1.2 billion, suggesting an improvement of 3% from the prior-year quarter.

However, the COVID-19 pandemic may have partially offset growth in life and health premiums in the to-be-reported quarter.  Decline in life and health sales owing to the pandemic is likely to have resulted in lower premium growth in the to-be-reported quarter.

Moreover, lower commissions and other expenses resulting from the company’s lower sales may have offset pandemic induced higher claims witnessed at Globe Life. Reduced premiums and higher claims, in turn, might have dented the company’s underwriting results in the second quarter to some extent.

In the to-be-reported quarter, net investment income, which contributes to the top line, is also likely to have stayed under pressure owing to low rate environment.

Furthermore, sales in each of the company’s distribution channels are likely to have suffered a setback on account of the pandemic in the to-be-reported quarter.

The Zacks Consensus Estimate for earnings per share is pegged at $1.58, indicating a decline of 5.4% from the year-ago reported figure.

Globe Life Inc. Price and EPS Surprise

Globe Life Inc. Price and EPS Surprise

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

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 -3.85%. This is because the Most Accurate Estimate of $1.52 is pegged lower than the Zacks Consensus Estimate of $1.58. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Globe Life carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

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:

Moody's Corporation MCO has an Earnings ESP of +7.17% and a Zacks Rank #3.

Apollo Global Management, Inc. APO has an Earnings ESP of +2.96% and a Zacks Rank #3.

Cboe Global Markets, Inc. CBOE has an Earnings ESP of +0.48% and a Zacks Rank of 3, at present.

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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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