CNO Financial (CNO) Q3 Earnings Beat Estimates, EPS View Revised
CNO Financial Group, Inc. CNO reported third-quarter 2023 adjusted earnings per share (EPS) of 88 cents, which beat the Zacks Consensus Estimate by 18.9%. Also, the bottom line jumped 31% year over year.
Total revenues increased 4.7% year over year to $947.5 million in the third quarter. The top line beat the consensus mark by 2.6%.
The strong third-quarter revenues were supported by increased new annualized premiums, investment income and general account assets. The upside was partially offset by higher benefits and expenses.
CNO Financial Group, Inc. Price, Consensus and EPS Surprise
CNO Financial Group, Inc. price-consensus-eps-surprise-chart | CNO Financial Group, Inc. Quote
Quarterly Performance
Total insurance policy income of $626 million rose 0.4% year over year on higher annuity and life insurance policy income but missed the Zacks Consensus Estimate of $632 million due to a decline in health insurance policy income.
CNO’s net investment income increased 9% year over year to $291.8 million in the third quarter. General account assets grew 12.4% year over year to $324.8 million, comfortably beating the consensus mark of $295.8 million.
Annuity collected premiums of $372.2 million increased 1% year over year. New annualized premiums for health and life products advanced 13% year over year to $98.3 million.
Total benefits and expenses were $731.9 million, which jumped from $677.4 million a year ago. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Sep 30, 2023)
CNO Financial exited the third quarter with unrestricted cash and cash equivalents of $460.8 million, which declined from the 2022-end level of $575.7 million.
Total assets of $33.5 billion rose from $33.1 billion at 2022-end.
Total shareholders’ equity jumped to $1.9 billion from $1.8 billion as of Dec 31, 2022.
Book value per diluted share increased to $16.58 in the third quarter from $16.07 a year ago.
Adjusted operating return on equity came in at 8.5%, which deteriorated 340 basis points year over year.
The debt-to-capital ratio was 37.6% at the third-quarter end.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $56.9 million in the form of share buybacks worth $40 million and dividends of $16.9 million.
As of Sep 30, 2023, the company had remaining repurchase funds of $601.8 million.
2023 Guidance
CNO Financial now expects 2023 EPS in the range of $2.70-$2.80, indicating a decline from the 2022 figure of $3.06. The company expects the expense ratio to be in the range of 19.2-19.4% for 2023. It anticipates the effective tax rate for the year to be around 23%.
Zacks Rank & Other Key Picks
CNO Financial currently has a Zacks Rank #2 (Buy). Investors interested in the broader Finance space can consider other top-ranked companies like Employers Holdings, Inc. EIG, Assurant, Inc. AIZ and AMERISAFE, Inc. AMSF. While Employers Holdings currently sports a Zacks Rank #1 (Strong Buy), Assurant and AMERISAFE carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Employers Holdings’ current year earnings indicates a 17.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 26.5%. Furthermore, the consensus estimate for EIG’s revenues in 2023 suggests 17.5% year-over-year growth.
The Zacks Consensus Estimate for Assurant’s current year earnings indicates a 27.5% year-over-year increase. It beat earnings estimates in each of the past four quarters, with an average surprise of 42.4%. Also, the consensus mark for AIZ’s revenues in 2023 suggests 5.1% year-over-year growth.
The Zacks Consensus Estimate for AMERISAFE’s current year earnings is pegged at $2.90 per share, which improved by 2 cents in the past month. It has witnessed one upward estimate revision against none in the opposite direction during this time. It beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 14%.
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