It has been a couple of month because the final earnings report for Globe Life (GL). Shares have misplaced about 2% in that time-frame, underperforming the S&P 500.
Will the current detrimental pattern proceed main as much as its subsequent earnings launch, or is Globe Life due for a breakout? Earlier than we dive into how traders and analysts have reacted as of late, let’s take a fast have a look at the newest earnings report with a purpose to get a greater deal with on the essential catalysts.
Globe Life Q1 Earnings Meet Estimates, Enhance Y/Y
Globe Life Inc.’s first-quarter 2020 internet working earnings of $1.73 per share matched the Zacks Consensus Estimate. The underside line improved 5.5% 12 months over 12 months on the again of upper premiums from Life and Well being segments and Insurance coverage underwriting earnings.
Behind the Headlines
Globe Life reported whole premium revenues of $929.Eight million, up 4% 12 months over 12 months. This upside was primarily pushed by increased premiums from Life and Well being Insurance coverage companies.
Internet funding earnings elevated 1% 12 months over 12 months to $228.9 million.
The corporate’s working revenues of $1.1 billion grew 0.8% from the year-ago quarter. This top-line enchancment was pushed by development in Life and Well being Insurance coverage premiums together with increased internet funding earnings. Nonetheless, the highest line missed the Zacks Consensus Estimate by 3.8%.
Extra funding earnings, a measure of profitability, decreased 4% 12 months over 12 months to $62.7 million.
Whole insurance coverage underwriting earnings grew 4% 12 months over 12 months to $181.2 million. Enchancment in Life Insurance coverage underwriting margins and Well being Insurance coverage underwriting margins resulted on this upside. Nonetheless, increased administrative bills partially offset this upside.
Administrative bills have been up 7.5% 12 months over 12 months to $64 million.
Whole advantages and bills rose 4.4% 12 months over 12 months to $930.1 million, primarily as a result of elevated policyholder advantages, increased amortization of deferred acquisition prices, commissions, premium taxes, and non-deferred acquisition prices and different working expense.
Premium revenues at Life Insurance coverage operations elevated 4% 12 months over 12 months to $649.6 million, pushed by increased premiums written by distribution channels like American Revenue Company, International Life Direct Response and Liberty Nationwide Unique (LNL) Company. Whereas American Revenue Company grew 7%, International Life Direct Response was up 1% and LNL Company inched up 3%.
Life Insurance coverage underwriting earnings improved 5% 12 months over 12 months to $178.Eight million. Internet gross sales of $110.6 million have been 5% increased on a year-over-year foundation.
Medical health insurance premium revenues rose 5% 12 months over 12 months to $280.2 million. Underwriting earnings of $63.5 million elevated 3% 12 months over 12 months. Internet well being gross sales grew 9% 12 months over 12 months to $42 million.
Annuity underwriting margins declined 6% 12 months over 12 months to $2.Three million.
Adjusted shareholders’ fairness as of Mar 31, 2020 elevated 4.6% 12 months over 12 months to $5.Three billion.
Globe Life reported ebook value per share (excluding internet unrealized positive aspects on fastened maturities) of $49.66, up 9.3% 12 months over 12 months.
As of Mar 31, 2020, working return on fairness (excluding internet unrealized positive aspects on fastened maturities) was 14.1%, reflecting a contraction of 60 foundation factors 12 months over 12 months.
Share Repurchase and Dividend Replace
Within the first quarter, Globe Life repurchased 1.6 million shares for a complete price of $139 million for a mean share price of $85.47.
Globe Life tasks internet working earnings per share to be within the vary of $6.65 to $7.15 for the 12 months ending Dec 31, 2020.
How Have Estimates Been Transferring Since Then?
It seems, estimates evaluate have trended downward through the previous month.
Presently, Globe Life has a mean Development Rating of C, a grade with the identical rating on the momentum entrance. Charting a considerably related path, the stock was allotted a grade of B on the value facet, placing it within the second quintile for this funding technique.
Total, the stock has an combination VGM Rating of B. Should you aren’t targeted on one technique, this rating is the one you have to be all for.
Estimates have been broadly trending downward for the stock, and the magnitude of those revisions signifies a downward shift. Notably, Globe Life has a Zacks Rank #3 (Maintain). We count on an in-line return from the stock within the subsequent few months.
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