Primerica's (PRI) Stock on the Rise Since Q3 Earnings Beat
Shares of Primerica, Inc. PRI have gained 0.9% since it reported third-quarter 2023 results on Nov 8. The life-licensed sales force exhibited growth. The Term Life segment benefited from the size and stability of the in-force block, predictable margins and strong sales. Growth in client asset values favored Investment and Savings Products. Life-licensed sales force increased 4% at quarter end.
PRI delivered third-quarter 2023 operating income of $4.28 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line improved 41.7%.
Operating revenues of $713 million in the third quarter beat the consensus mark by 1.6%. The metric rose 5.5% from the year-ago quarter.
Primerica, Inc. Price, Consensus and EPS Surprise
Primerica, Inc. price-consensus-eps-surprise-chart | Primerica, Inc. Quote
Operational Update
Term Life Insurance revenues increased 3% year over year to $428.7 million, driven by 6% growth in adjusted direct premiums.
Investment and Savings Products revenues increased 9% to $218.9 million on higher sales-based commission revenues as well as asset-based revenues.
Corporate and Other Distributed Products revenues increased 22% to $52.1 million. Senior Health generated $13.4 million in revenues, down 22% year over year.
Life Insurance policies issued were 88,589, up 24.5% from the prior-year quarter’s figure. Investment and Savings Products sales were flat year over year at $2.2 billion in the third quarter.
Total benefits and expenses of $512.1 million were down 7.3% year over year on lower future policy benefits remeasurement and the absence of goodwill impairment loss.
Adjusted operating income before taxes increased 9% year over year, driven by a 7% increase in Term Life Insurance operating income and a 9% rise in Investment and Savings Products. Senior Health income plunged 104%. Adjusted operating income at Corporate and Other Distributed Products increased 193%.
Financial Update
Cash and cash equivalents were $468.8 million as of Sep 30, 2023, down from $489.2 million at 2022-end.
Total investments were $4.1 billion, up 0.6% from 2022-end.
Debt was $593.9 million, up from $592.9 million at 2022-end.
Stockholders’ equity totaled $2.3 billion, up 13.8% from 2022-end.
Primerica Life Insurance Company’s statutory risk-based capital ratio was about 445% as of Sep 30, 2023.
Capital Deployment Update
Primerica bought back shares worth $106.5 million in the third quarter and expects to exhaust the $375 million program by 2023 end.
The board of directors approved a dividend of 65 cents per share, to be paid out on Dec 12 to stockholders of record as of Nov 21, 2023.
Zacks Rank
Primerica currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Life Insurers
Voya Financial VOYA reported third-quarter 2023 adjusted operating earnings of $2.07 per share, which missed the Zacks Consensus Estimate by about 1%. The bottom line decreased 10% year over year, attributable to lower net underwriting results, partially offset by higher fee income. Adjusted operating revenues amounted to $281 billion, which decreased 21.1% year over year. The top line missed the Zacks Consensus Estimate by 16.4%.
Net investment income increased 4.8% year over year to $547 million. Meanwhile, fee income of $489 million increased 9.9% year over year. Premiums totaled $682 million, up 12.5% from the year-ago quarter. As of Sep 30, 2023, VOYA’s assets under management, assets under administration and advisement totaled $770.3 million.
Lincoln National Corporation LNC reported third-quarter 2023 adjusted earnings of 23 cents per share, which missed the Zacks Consensus Estimate by 86.9%. However, the bottom line significantly improved from a loss of $11.49 a year ago. Adjusted operating revenues grew 5.7% year over year to $4.7 billion. The top line missed the consensus mark by 1.6%.
The Annuities segment recorded an operating income of $248 million, which decreased 9.8% year over year and missed the estimate by 9%. The metric suffered from increased expenses. Operating income in the Retirement Plan Services segment came in at $43 million, which fell 9% year over year and missed our estimate of $47.1 million due to an elevated expense level. The Life Insurance segment reported an operating income of $173 million in the quarter under review, improving 92% year over year, as the year-ago income included massive unfavorable items. The Group Protection segment recorded an operating income of $68 million in the quarter under review, which rose from $12 million a year ago but was lower than our estimate. This significant year-over-year jump can be attributed to better disability underwriting results.
American Equity Investment Life Holding Company AEL reported third-quarter 2023 adjusted net earnings of $2.45 per share, which beat the Zacks Consensus Estimate by 45.8%. The bottom line rebounded from the year-ago loss of 10 cents per share. Operating total revenues were $694.3 million, up 1.4% year over year due to higher annuity product charges and other revenues.
Premiums and other considerations decreased 6.4% year over year to $2.6 million. The figure was lower than our estimate of $3.2 million. Net investment income decreased 3.8% on a year-over-year basis to $586.6 million. The figure was higher than our estimate of $549.7 million. The investment spread was 2.73%, unchanged from the year-ago quarter.
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