Will StanCorp (SFG) Q3 Earnings Miss Due to Low Premium?

Zacks Equity Research
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StanCorp Financial Group Inc. (SFG) is set to report third-quarter 2014 results on Oct 22 after the market closes. Last quarter, the company delivered a -19.17% surprise. Let’s see how things are shaping up for this announcement.

Factors Influencing This Past Quarter

Employee Benefits sale is expected remain weak, which in turn will create pressure on premium growth. Investment results might be hurt by a soft interest rate environment

Pricing actions for both new and renewed long-term disability businesses, to counter higher claims incidence and a low interest rate, might limit top-line improvement.

Nonetheless, Asset Management of StanCorp Financial is expected to deliver another quarter of solid results on the strength of higher administrative fees resulting from an increase in assets under administration.

Earnings Whispers

Our proven model does not conclusively show that StanCorp Financial is likely to beat 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: StanCorp Financial has +9.85% Earnings ESP. This is because the Most Accurate estimate stands at $1.45 while the Zacks Consensus Estimate is pegged at $1.32.

Zacks Rank: StanCorp Financial has a Zacks Rank #4 (Sell). Notably, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Stocks to Consider

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

Chubb Corp. (CB), Earnings ESP of +5.24% and a Zacks Rank #2 (Buy).

The Allstate Corp. (ALL) Earnings ESP of +3.70% and a Zacks Rank #2.

Symetra Financial Corp. (SYA), Earnings ESP of +2.27% and a Zacks Rank #2.

Read the Full Research Report on SFG
Read the Full Research Report on CB
Read the Full Research Report on ALL
Read the Full Research Report on SYA


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