UPDATE: Lincoln National 3Q Profit Up 3.3% On Gain From Asset Sale
28 Octubre 2009 - 4:10PM
Noticias Dow Jones
Lincoln National Corp.'s (LNC) third-quarter profit--its first
profit in a year--rose 3.3% on a gain from an asset sale.
Shares rose 9.4% to $24.35 in after-hours trading as the life
insurer and variable-annuity provider topped Wall Street's
expectations and gave a positive report on customer reaction to its
revamped annuity products. The stock has quadrupled from a 25-year
low last November but is down 20% from its 52-week high two weeks
ago.
Chief Executive Dennis Glass pointed to quarter-on-quarter
growth in a number of measurements. "We have strengthened our
capital position, sharpened our focus on the core insurance and
retirement businesses, reinforced our distribution relationships,
and updated our product portfolios to better align consumer value,
risk management and profitability in today's environment," he
added.
In recent quarters, Lincoln has modified its variable annuity
products and gave a higher profile to some fixed and indexed
products that appeal to more risk-wary customers.
Individual annuity deposits rose from the previous quarter and
from a year earlier, helped by the product changes and improvements
in distribution, the company said.
Steven Schwartz, an analyst with Raymond James, called the
annuity deposits "much better than expected" and said that Lincoln
beat his earnings-per-share expectation by about 4 cents after
adjusting for one-time items. Lincoln is one of two life insurers
that participated in the Treasury Department's Troubled Asset
Relief Program, taking $950 million of the government's approved
$2.5 billion, and it raised about $1.2 billion in stock and debt
sales. Higher investment losses and variable-annuity costs had
pushed the company into the red for the past three quarters. In
August, Lincoln sold its asset-management business, Delaware
Management Holdings Inc., to Macquarie Group, an Australian
investment banker, for $428 million.
For the latest quarter, Lincoln reported a profit of $153.3
million, or 44 cents a share, compared with $148.4 million, or 58
cents a share, a year earlier. Operating income, which excludes
realized capital gains and losses and other items, fell to 84 cents
a share from $1.16.
Revenue slipped 8.3% to $2.08 billion.
Analysts estimated operating earnings of 76 cents on revenue of
$2.44 billion, according to a poll by Thomson Reuters.
Lincoln National, which uses Lincoln Financial Group as its
marketing name, said its largest segment, individual variable
annuities, reported a 28% decrease in earnings. Gross deposits grew
5%.
Meanwhile, life insurance profit was flat and sales fell
23%.
-By Lavonne Kuykendall and Kathy Shwiff, Dow Jones Newswires;
(312) 750 4141; lavonne.kuykendall@dowjones.com