CNO Financial Ends on a High Note - Analyst Blog
12 Febbraio 2013 - 11:40AM
Zacks
CNO Financial Group Inc. (CNO) reported
fourth-quarter 2012 adjusted operating earnings of 25 cents per
share, surpassing the Zacks Consensus Estimate of 23 cents. Results
also surpassed 18 cents earned in the year-ago quarter.
Adjusted operating income in the quarter was $60.0 million, up 18%
from $51.0 million in the fourth quarter of 2011.
Apart from improved operating performance of most segments,
better-than-expected call and prepayment income and favorable
mortality in the universal life and traditional life businesses
drove operating earnings.
Including net realized investment gains of $10.8 million, fair
value changes in embedded derivative liabilities of $2.6 million,
loss on extinguishment of debt of $0.7 million and decrease in
valuation allowance for deferred tax assets of $25.8 million, the
company reported net income of $101.2 million or 41 cents per
share, comparing favorably with net income of $64.4 million or 23
cents per share.
CNO Financial’s revenues inched up 1% to $1.06 billion from
$1.05 billion in the prior-year quarter. Total revenue also
surpassed the Zacks Consensus Estimate of $1.03 billion. Total new
annualized premium increased 2% year over year to $105.7 million.
Total benefits and expenses declined 0.6% year over year to $943.1
million.
Segment Update
Pre-tax operating earnings in the Bankers Life
segment declined 4.5% year over year to $73.7 million in the
reported quarter.
Washington National’s pre-tax operating
earnings were $34.6 million in the quarter, surging 20% from the
year-ago quarter.
Pre-tax operating income of Colonial Penn
increased to $3.2 million from $1.8 million in the comparable
quarter last year. The adoption of the new accounting standard
related to deferred acquisition costs had a material impact on the
results of this segment as CNO Financial could not defer the
segment’s advertising costs. Consequently, the company expects a
pre-tax loss of $5–$10 million in 2013 based on its advertising
plan. Most of this loss is expected in the first quarter of
2013.
Other CNO Business reported pre-tax operating
income of $5.2 million in the quarter.
Corporate Operations, which includes investment
advisory subsidiary and corporate expenses, narrowed pre-tax loss
to $2.7 million from $8.4 million in the year-ago quarter, on the
basis of improved investment income.
Full Year 2012 Highlights
Full-year operating earnings came in at 69 cents, a cent ahead
of the Zacks Consensus Estimate of 68 cents and 13% above 61 cents
earned in 2011. Operating earnings in 2012 were $180.4 million, up
19% over the prior year.
The company reported net income of $221.0 million or 83 cents
per share compared with $335.7 million or $1.15 per share in
2011.
Full-year revenue grossed $4.34 billion, increasing 5% over
2011. Total revenue also surpassed the Zacks Consensus Estimate of
$4.26 billion. Full-year total benefits and expenses increased 10%
over 2011 to $4.2 billion.
Financial Update
During 2012, the consolidated statutory risk-based capital ratio
of CNO Financial’s insurance subsidiaries increased 9 percentage
points to 367%, driven by statutory earnings of $337 million and
dividend of $265 million paid to non-insurance holding
companies.
In addition, unrestricted cash and investments held by CNO
Financial’s non-insurance subsidiaries decreased to $294 million as
of Dec 31, 2012 from 313.6 million as of Sep 30, 2012 due to share
buyback, dividend payment and debt repayment.
CNO Financial bought back 21.5 million shares for $180 million
in 2012. The company also redeemed $200 million worth of
convertible debentures for $355 million during the year.
As of Dec 31, 2012, debt-to-total capital ratio, excluding
accumulated other comprehensive income (loss), increased 240 basis
points over 2011 end to 20.7% due to the company’s recent
recapitalization plan. Book value per common share, excluding
accumulated other comprehensive income (loss), increased to $17.39
as of Dec 31, 2012 from $15.88 as of Dec 31, 2011.
As of Dec 31, 2012, CNO Financial had total assets worth $34.1
billion and shareholders’ equity stood at $5.0 billion.
Zacks Rank
CNO Financial carries a Zacks Rank #3 (Hold). Other
multi-line insurers worth considering are Ageas
SA/NV (AGESY), Assured Guaranty Ltd.
(AGO) and AXA Group (AXAHY). All these companies
carry a Zacks Rank #1 (Strong Buy).
(AGESY): ETF Research Reports
ASSURED GUARNTY (AGO): Free Stock Analysis Report
AXA SA -SP ADR (AXAHY): Free Stock Analysis Report
CNO FINL GRP (CNO): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni Ageas (PK) (USOTC:AGESY)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Ageas (PK) (USOTC:AGESY)
Storico
Da Mag 2023 a Mag 2024