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Lincoln National Reaches 52-Week High on Strong Q2 Results

Zacks Equity Research

On Aug 21, 2014, Lincoln National Corporation (LNC) scaled a 52-week high of $53.86 after posting strong second-quarter financial results, which included a 7.30% positive earnings surprise. With respect to earnings trend, this life insurer has delivered positive earnings surprises in the trailing four quarters with an average beat of 7.38%.

In fact, shares of Lincoln National rose nearly 1.6% over the last few trading sessions to close at $53.83, since the company reported second-quarter earnings results on Jul 30, 2014. Furthermore, the one-year return on the stock is 23.60%, above the S&P 500’s return of 20.32% as well as that of other players in the insurance industry like AEGON N.V. (AEG), ING Groep N.V. (ING) and MetLife, Inc. (MET) that generated returns of 0.78%, 21.05% and 11.72%, respectively over the same period.

In the second quarter, Lincoln National’s bottom line not only surpassed the Zacks Consensus Estimate but also improved year over year on growth in total account balances and improved revenues from double-digit growth in premiums and fee income.

Higher sales in re-priced products and change in business mix to higher return generating products also aided the upside. Moreover, the top line exceeded the Zacks Consensus Estimate and was higher than the year-ago quarter revenues. Although expenses increased in the quarter, a higher-than-expected rise in revenues aided Lincoln National’s margins.
During the reported quarter, the company’s financial position also remained quite strong, which helped it to increase the existing share repurchase program to $1.0 billion and repurchase shares worth $150 million, thereby reducing the share count. This not only enhanced investors’ returns but also was responsible for boosting earnings per share.

Other positive tidings at the company that contributed to the 52-week high were the enhancement of the Ibboston Insight Series investment line-up at Lincoln National’s employer-sponsored retirement plan program, Lincoln DirectorSM and expansion of the portfolio of Survivorship life insurance solutions.

Currently, Lincoln National carries a Zacks Rank #2 (Buy).

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