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FBL Financial (FFG) Q1 Earnings and Revenues Miss Estimates

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FBL Financial Group, Inc. FFG reported first-quarter 2018 operating earnings of $1.10 per share, which missed the Zacks Consensus Estimate of $1.22 by 9.8%. The bottom line improved 1.9%.

FBL Financial Group, Inc. Price, Consensus and EPS Surprise

FBL Financial Group, Inc. Price, Consensus and EPS Surprise | FBL Financial Group, Inc. Quote

 

Earnings benefited from other investment-related income of 11 cents per share and lower effective tax rate, partially offset by unfavorable mortality results in the Life Insurance segment.

Behind the Headlines

Revenues of $182 million missed the Zacks Consensus Estimate of $186 million by 2.3%. The top line remained flat year over year.

FBL Financial’s total premiums collected were $169.7 million, which slipped 0.2% year over year. Premiums and product charges increased 2.6% to $79.6 million in the quarter under review. Interest sensitive products charges were down 3% year over year while traditional life insurance premiums improved 2% year over year.
 
Investment income remained flat year over year at $101 million in the reported quarter as an increase in average invested assets was offset by lower investment yields. As of Mar 31, 2018, 97% of fixed maturity securities in the company’s portfolio accounted for investment grade debt securities.

Total benefits and expenses increased 5.2% to $155.7 million in the first quarter, mainly due to higher Traditional life insurance benefits, underwriting, acquisition and insurance expenses plus other expenses.

Financial Update

As of Mar 31, 2018, book value per share was $50.78 compared with $55.59 as of Dec 31, 2017. Excluding accumulated other comprehensive income, the metric was $43.26 at the end of the first quarter compared with $44.16 at 2017-end.

Cash and cash equivalents of $13.7 million at 2017-end compared unfavorably with $52.7 million at 2017-end. Total investments increased to $8.6 billion as of Mar 31, 2018, declining 8.6% from year-end 2017.

The company exited the quarter with total assets of $10 billion, down 0.3% from year-end 2017. Debt level remained flat at $97 million compared with the level as of Dec 31, 2017.

Capital Deployment

During the first quarter, the company bought back 0.1 million shares and approved a $50-million repurchase program. Additionally, the company paid $1.50 per share of special dividend and 46 cents as regular dividend.

Guidance

The results for the first three quarters of 2018 are expected to be better than the year-ago period benefiting from lower taxes. Results at The Corporate segment in the final nine months of 2018 are anticipated to be negatively impacted, attributable to less favorable equity market performance on the closed-block variable business and lower equity income from low income housing tax credit (LIHTC) investments

Zacks Rank

FBL Financial carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other firms from the insurance industry having reported first-quarter earnings so far, the bottom line of The Progressive Corporation PGR and RLI Corp. RLI surpassed the respective Zacks Consensus Estimate while that of The Travelers Companies, Inc. TRV missed the same.

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FBL Financial Group, Inc. (FFG) : Free Stock Analysis Report
 
RLI Corp. (RLI) : Free Stock Analysis Report
 
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
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