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Horace Mann's (HMN) Q3 Earnings Top Estimates, Rise Y/Y

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Zacks Equity Research
·4 min read
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Horace Mann Educators Corporation HMN delivered third-quarter 2020 adjusted earnings of 82 cents per share, beating the Zacks Consensus Estimate of 72 cents by 13.9%. The bottom line also improved 28.1% year over year on the back of lower expenses.

Quarterly Operational Update

Total revenues of $337 million rose 0.1% year over year on higher net investment income.

Net income soared 43.7% year over year.

Net investment income of the company inched up 0.8% year over year.

Core earnings of the company increased 28.1% year over year in the third quarter.

Operating expenses of the company fell 9% year over year on lower benefits, claims and settlement expenses as well as interest credited.

Horace Mann Educators Corporation Price, Consensus and EPS Surprise

Horace Mann Educators Corporation Price, Consensus and EPS Surprise
Horace Mann Educators Corporation Price, Consensus and EPS Surprise

Horace Mann Educators Corporation price-consensus-eps-surprise-chart | Horace Mann Educators Corporation Quote

Quarterly Segment Update

Property and Casualty’s written premiums declined 5.3% year over year in the third quarter to $172.8 million. This was due to the return of the reinstatement premiums related to the PG&E subrogation recovery.

Net investment income from this segment jumped 28% year over year.

Core earnings from the segment were up 11.3% year over year on the back of higher net investment income owing to limited partnership returns.

Combined ratio expanded 30 basis points (bps) year over year.

Supplemental segment’s sales were $1.4 million in the quarter, down 61.1% year over year due to limited school access because of the coronavirus pandemic.

Written premiums from the segment dipped 2.1% year over year to $32 million. Core earnings surged 53.6% year over year.

Core earnings of the company reflect favorable business trends and short-term benefits from alterations in policyholder behavior.

Retirement Segment’s annuity contract deposits climbed 6.9% year over year.

Core earnings from the business soared 32.2% year over year.

This segment witnessed net income of $7.8 million in the quarter under review, up 32.2% year over year on the back of lower costs.  

Life Segment's sales plunged 38.6% from the year-ago quarter. Core earnings from this segment fell 15.7% year over year.

Written premiums from the business slipped 2.9% from the year-ago period.

Financial Position

As of Sep 30, 2020, total assets were $13 billion, up 5.4% year over year.
The company exited the third quarter with shareholders’ equity of $1.72 billion.

The company had total debt of $437.2 million as of Sep 30, 2020, up 1.4% year over year.

2020 Outlook

The company raised its full-year earnings per share view to the band of $2.95-$3.15. Core ROE is estimated to be more than 9%.

Zacks Rank

Horace Mann Educators has a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the insurance industry players, which reported third-quarter results so far, earnings of Cincinnati Financial Corporation CINF and First American Financial Corporation FAF missed the respective Zacks Consensus Estimate while that of RLI Corp. RLI) beat the same.

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