Unum Group (UNM) to Report Q2 Earnings: Here's What to Expect
Unum Group UNM is slated to report second-quarter 2023 earnings on Aug 1, after market close. The insurer delivered an earnings beat in three of the last four quarters, while missing in one, the average surprise being 18.61%.
Factors to Note
UNM’s premiums in the to-be-reported quarter are likely to have benefited from solid persistency in-force business and strong sales across segments.
Premiums are likely to have improved banking on strength at its Unum US and Colonial segment. The Zacks Consensus Estimate for second-quarter premium is pegged at $2.5 billion, implying an improvement of 2.9% from the prior-year reported figure. We expect premiums to rise 2.5% to $2.5 billion.
The Unum U.S. segment is likely to have benefited from favorable benefits experience in group product lines, sable performance at supplemental and voluntary lines, disciplined sales trends, strong persistency in group lines and growth of new product lines. Higher operating expenses might have been a partial offset. The Zacks Consensus Estimate for second-quarter premium income at the Unum U.S. segment is pegged at $1.6 billion, implying an improvement of 3.6% from the prior-year reported figure. We expect premiums to rise 3.9% to $1.6 billion.
Favorable benefits experience, higher premium income, in-force block growth and higher sales are likely to have favored performance at Colonial Life. The upside is likely to have been partially offset by higher operating expenses. The Zacks Consensus Estimate for second-quarter premium income at the Colonial Life segment stands at $434 million, indicating an increase of 1.4% from the prior-year level. We expect premiums to rise 1.9% to $436 million.
Growth in the in-force block, resulting from the impact of rate increases in the group long-term disability product line and higher persistency, is likely to have benefited Unum International in the to-be-reported quarter. Solid business in the United Kingdom and Poland are also likely to have accelerated the improvement. The Zacks Consensus Estimate for second-quarter premium income at the Unum International segment stands at $188 million, indicating an increase of 5.1% from the year-ago reported quarter. We expect premiums to rise 4% to $187 million.
Expenses are likely to have increased because of higher policy benefits, interest and debt expense, amortization of deferred acquisition costs and compensation expense. We expect total benefits and expenses to be $2.6 billion.
A continued share buyback is likely to have provided a boost to the bottom line.
The Zacks Consensus Estimate for earnings per share is pegged at $1.87, indicating a decrease of 2.1% from the year-ago reported figure.
Quantitative Model Prediction
Our proven model does not conclusively predict an earnings beat for Unum Group this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) that increases the chances of an earnings beat. This is not the case as you can see below.
Earnings ESP: It has an Earnings ESP of -0.06%. The is because the Most Accurate Estimate of $1.86 is pegged lower than the Zacks Consensus Estimate of $1.87. You can uncover the best stocks to buy r sell before they’re reported with our Earnings ESP Filter.
Unum Group Price and EPS Surprise
Unum Group price-eps-surprise | Unum Group Quote
Zacks Rank: Unum Group currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Aflac Incorporated AFL has an Earnings ESP of +1.41% and a Zacks Rank of 1. The Zacks Consensus Estimate for Aflac’s second-quarter 2023 earnings is pegged at $1.42 per share, indicating a decrease of 2.7% from the year-ago reported figure.
AFL’s earnings beat estimates in the last four quarters.
Lincoln National LNC has an Earnings ESP of +2.93% and a Zacks Rank of 3. The Zacks Consensus Estimate for Lincoln National’s second-quarter 2023 earnings is pegged at $1.92 per share, indicating a decrease of 13.9% from the year-ago reported figure.
LNC’s earnings missed estimates in three of the four trailing quarters while beating in one.
American Equity Investment AEL has an Earnings ESP of +1.12% and a Zacks Rank of 2. The Zacks Consensus Estimate for AEL ’s second-quarter 2023 earnings is pegged at $1.65 per share, indicating an increase of 68.3% from the year-ago reported figure.
AEL’s earnings beat estimates in three of the last four quarters and missed in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lincoln National Corporation (LNC) : Free Stock Analysis Report
Aflac Incorporated (AFL) : Free Stock Analysis Report
Unum Group (UNM) : Free Stock Analysis Report
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
