Unum Group (UNM) to Report Q4 Earnings: What's in the Offing?
Unum Group UNM is slated to report fourth-quarter 2022 earnings on Jan 31, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average being 34.9%.
Factors to Note
The Unum U.S. segment is likely to have benefited from favorable benefits experience in group product lines and higher premium income, partially offset by higher operating expenses and lower net investment income. The Zacks Consensus Estimate for fourth-quarter premium income at the Unum U.S. segment is pegged at $1.6 billion, implying an improvement of 3.5% from the prior-year reported figure.
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 be partially offset by higher operating expenses and lower net investment income. The Zacks Consensus Estimate for fourth-quarter premium income at the Colonial Life segment stands at $434 million, indicating an increase of 2.6% from the prior-year level.
Growth in the in-force block, resulting from the impact of rate increases in the group long-term disability product line and higher persistency are likely to have benefited Unum International in the to-be-reported quarter. The Zacks Consensus Estimate for fourth-quarter premium income at the Unum International segment stands at $173 million.
Decline in the yield on invested assets and lower miscellaneous investment income are likely to have weighed on net investment income. This downside may have been partially offset by higher level of invested assets and higher investment income from inflation index-linked bonds held by Unum UK. The Zacks Consensus Estimate for the same is pegged at $517 million, indicating a 6.2% decline from the prior-year quarter. We expect net investment income to be $519.6 million.
Expenses are likely to have increased because of higher commissions, 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 $1.46, indicating an increase of 64% from the year-ago reported figure. Our estimate for fourth-quarter EPS is $1.43.
Quantitative Model Prediction
Our proven model does not conclusively predict an earnings beat for Unum Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) 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%. You can uncover the best stocks to buy or 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:
Arch Capital Group Ltd. ACGL has an Earnings ESP of +5.42% and a Zacks Rank of 3. The Zacks Consensus Estimate for Arch Capital’s fourth-quarter 2022 earnings is pegged at $1.34 per share, indicating an increase of 5.5% from the year-ago reported figure.
ACGL’s earnings beat estimates in three of the last four quarters and missed in the other one.
NMI Holdings Inc. NMIH has an Earnings ESP of +2.33% and a Zacks Rank of 3. The Zacks Consensus Estimate for NMI Holdings’ fourth-quarter 2022 earnings is pegged at 86 cents per share, indicating an increase of 17.8% from the year-ago reported figure.
NMIH’s earnings beat estimates in each of the four trailing quarters.
Everest Re Group, Ltd. RE has an Earnings ESP of +5.61% and a Zacks Rank of 3. The Zacks Consensus Estimate for Everest Re’s fourth-quarter 2022 earnings is pegged at $9.29 per share, indicating an increase of 1.9% from the year-ago reported figure.
RE’s earnings beat estimates in three of the last four quarters and missed in the other one.
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Unum Group (UNM) : Free Stock Analysis Report
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