A month has gone by since the last earnings report for CNO Financial (CNO). Shares have lost about 1.8% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CNO due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
CNO Financial Q1 Earnings Lag Estimates, Down Y/Y
CNO Financial Group, Inc.’s reported first-quarter 2019 adjusted earnings per share of 41 cents missed the Zacks Consensus Estimate by 12.8%. Also, the bottom line declined 6.8% year over year. The company’s performance was negatively impacted by its Long-term care segment.
However, in the quarter under review, CNO Financial’s total revenues increased 1.5% year over year to $1023 million. Moreover, the bottom line surpassed the Zacks Consensus Estimate by 6.8%, mainly owing to total realized gain as well as fee revenues and other income.
Quarterly Operational Update
Total collected premiums were $945 million, up 1.4% from the prior-year quarter’s level, mainly driven by Bankers Life segment.
New annualized premiums for life and health products amounted to $79.8 million, up 2.2% from the year-ago period.
First-year collected premiums totaled $391.5 million, up 18% from the year-earlier quarter’s tally, primarily banking on the contribution from Bankers Life segment.
Quarterly Segment Update
Total collected premiums were $683.9 million, up 9% year over year, mainly aided by annuity.
New annualized premiums for life and health products decreased 6.2% year over year to $33.5 million.
In the third quarter of 2018, the company ceded the Bankers Life legacy long-term care business under a 100% indemnity coinsurance agreement.
Total collected premiums of $176.8 million were up marginally 0.3% year over year.
New Annualized premiums from life and health products were $23.9 million, up 0.4% from the year-ago quarter’s figure.
Total collected premiums were $77.2 million, up 2.5% year over year.
New annualized premiums were $22.4 million, up 20.4% from the amount recorded in the comparable quarter last year.
Long-Term Care in Run-Off
Total collected premiums were $3.6 million, down 92.7% year over year.
Deteriorating Financial Position
Unrestricted cash and investments held by CNO Financial’s holding company were $243 million as of Mar 31, 2019, up 3% from the level at 2018 end.
Debt-to-capital ratio was 19.3% as of Mar 31, 2019compared with 21.4% at 2018 end.
During the quarter under review, the company completed the buyout of Web Benefits Design.
Securities Repurchase and Divided Update
During the first quarter, the company bought back shares worth $47 million.
Dividends paid on common stock totaled $16.4 million in the same period.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Currently, CNO has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
CNO has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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