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CNO Financial's (CNO) Q2 Earnings Miss Estimates, Up Y/Y

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CNO Financial's (CNO) Q2 Earnings Miss Estimates, Up Y/Y

CNO Financial's (CNO) second-quarter earnings gain from a significant performance at its Bankers Life segment.

CNO Financial Group, Inc.’s CNO second-quarter 2018 adjusted earnings of 49 cents per share missed the Zacks Consensus Estimate of 51 cents. However, the bottom line improved 8.9% year over year, mainly driven by the Bankers Life segment.

CNO Financial Group, Inc. Price and EPS Surprise

CNO Financial Group, Inc. Price and EPS Surprise | CNO Financial Group, Inc. Quote

CNO Financial’s total revenues slipped 1% year over year to $1,046.3 million in the reported quarter. However, the top line slightly surpassed the Zacks Consensus Estimate by 1.5%.

Quarterly Operational Update

Total collected premiums were $947.6 million, up 2% from the prior-year quarter’s level mainly driven by Bankers Life segment.

New annualized premiums for life and health products amounted to $81.8 million, down 0.1% from the year-ago period.

First-year collected premiums totaled $369 million, up 5% from the year-earlier quarter’s tally, primarily because of the contribution by Bankers Life segment.

Quarterly Segment Update

Bankers Life

Total collected premiums were $697 million, up 2% year over year, driven by strong sales and persistency.

New annualized premiums for life and health products decreased 3% year over year to $38.9 million.

Washington National

Total collected premiums of $172.8 were up 3% year over year.

New Annualized premiums from life and health products were $26 million, up 2% from the year-ago quarter’s figure.

Pretax operating earnings were up 8% compared with the prior-year quarter’s count.

Colonial Penn

Total collected premiums were $73.8 million, up 1% year over year.

New annualized premiums were $16.9 million, up 5% from the amount recorded in the comparable quarter last year.

The pretax earnings were $5.4 million, lower than $8 million in the year-ago period, reflecting higher market expenditure in the second quarter of 2018.

Long-Term Care in Run-Off

Total collected premiums were $4 million, down 9% year over year.

The long-term care business was recaptured in September 2016 and the segment recognized pretax earnings of $3.1 million in the quarter under review. Meanwhile, the figure soared 82% year over year.

The company expects this segment to report normalized earnings before net realized investment gains (losses) of approximately breakeven over the long term.  However, this segment’s quarterly results can be volatile.

Corporate Operations

The segment includes performance of the investment advisory subsidiary and corporate expenses.

Pretax loss of $14 million in the second quarter was wider than $13.2 million incurred in the year-ago quarter, mainly due to lower investment returns, offset by lower expenses.

Financial Update

Unrestricted cash and investments held by CNO Financial’s holding company were $376 million as of Jun 30, 2018, down 5.2% from the level at year-end 2017.

Debt-to-capital ratio was 17.1% as of Jun 30, 2018 compared with 15.9% at the end of 2017.

Securities Repurchase and Divided Update

During the second quarter, the company bought back common stock worth $60.5 million under authorization program. Additionally, it repurchased 3 million common shares at an average cost of $20.18 per share.

Dividends paid on common stock totaled $16.5 million in the same period.

Zacks Rank and Performance of Other Multiline Insurers

CNO Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players from the insurance industry having reported second-quarter earnings so far, earnings of MGIC Investment Corporation MTG and The Progressive Corporation PGR beat the respective Zacks Consensus Estimate while the bottom line of Brown & Brown, Inc. BRO missed the same.

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