Lincoln National (NYSE:LNC) Issues Earnings Results

Lincoln National (NYSE:LNC) issued its earnings results on Thursday. The financial services provider reported $1.72 earnings per share for the quarter, missing analysts’ consensus estimates of $1.96 by ($0.24), FiscalAI reports. The business had revenue of $5.06 billion for the quarter, compared to the consensus estimate of $4.97 billion. Lincoln National had a return on equity of 17.35% and a net margin of 12.21%. During the same quarter in the prior year, the business earned $2.04 EPS.

Here are the key takeaways from Lincoln National’s conference call:

• Lincoln said it largely completed its three-year transformation goals, including transferring about 60% of guaranteed universal life reserves to reinsurance partners and addressing its preferred stock. With its Holdco cash build for the remaining preferred redemption complete, the company resumed share repurchases and expects to increase them, while continuing to invest in its businesses.
• Adjusted operating income available to common stockholders was $339 million, or $1.72 per share, including a $95 million after-tax reduction from the annual assumption review. Alternative investments returned 16.5% annualized, above the 10% target, contributing $55 million of after-tax above-target income.
• Annuity sales rose 21% sequentially to $4.3 billion, led by fixed annuity sales that more than doubled to $1.4 billion; spread-based products made up 67% of sales. Management expects fixed annuity momentum to continue, though it forecast fourth-quarter earnings roughly flat with the third quarter, excluding the review impact.
• Group Protection earnings fell to $77 million from $110 million a year earlier, as disability severity and the normalization of previously favorable incidence pressured results. Lincoln expects the full-year margin to finish at or modestly below the low end of its 8%–9% range, with incidence pressure expected to persist.
• Life earnings improved to $130 million from $54 million a year earlier, but results benefited from favorable mortality and above-target alternative returns; management said the business generated about $158 million over the past year excluding those factors. Retirement Plan Services earnings also increased, but first-year sales were down and management expects uneven flows as its strategic realignment proceeds.

Lincoln National Price Performance

Lincoln National stock traded down $2.40 during midday trading on Thursday, hitting $39.20. 3,672,346 shares of the company’s stock were exchanged, compared to its average volume of 1,874,914. The company has a market cap of $7.51 billion, a P/E ratio of 3.40, a PEG ratio of 1.40 and a beta of 1.16. The company has a debt-to-equity ratio of 0.62, a quick ratio of 0.27 and a current ratio of 0.27. The stock has a 50-day moving average price of $41.59 and a two-hundred day moving average price of $39.02. Lincoln National has a 52-week low of $32.18 and a 52-week high of $47.67.

Lincoln National Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Monday, November 2nd. Investors of record on Monday, October 12th were given a dividend of $0.45 per share. This represents a $1.80 annualized dividend and a yield of 4.6%. The ex-dividend date was Friday, October 9th. Lincoln National’s payout ratio is presently 15.60%.

Insider Activity

In other news, Director Gary C. Kelly sold 15,007 shares of the business’s stock in a transaction dated Wednesday, August 12th. The stock was sold at an average price of $26.50, for a total transaction of $397,685.50. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, EVP Sean Woodroffe sold 11,000 shares of the business’s stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $45.28, for a total value of $498,080.00. Following the transaction, the executive vice president directly owned 119,947 shares of the company’s stock, valued at $5,431,200.16. The trade was a 8.40% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Company insiders own 1.03% of the company’s stock.

Wall Street Analyst Weigh In

LNC has been the topic of several research reports. National Bank Financial set a $49.00 price target on shares of Lincoln National in a research report on Wednesday, October 7th. TD Cowen raised their price objective on shares of Lincoln National from $37.00 to $42.00 and gave the stock a “hold” rating in a report on Wednesday, July 22nd. Jefferies Financial Group lifted their price objective on shares of Lincoln National from $56.00 to $57.00 and gave the company a “buy” rating in a research note on Friday, July 10th. Mizuho reduced their price objective on shares of Lincoln National from $53.00 to $49.00 and set an “outperform” rating for the company in a research note on Wednesday, October 7th. Finally, UBS Group boosted their target price on shares of Lincoln National from $44.00 to $46.00 and gave the company a “neutral” rating in a report on Tuesday, October 6th. Seven investment analysts have rated the stock with a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of “Hold” and an average price target of $48.67.

Lincoln National News Roundup

Here are the key news stories impacting Lincoln National this week:

• Positive Sentiment: Lincoln reported Q3 revenue of $5.06 billion, topping analysts’ $4.97 billion estimate. The company also reported higher net income year over year. Lincoln National Corp. Profit Rises In Q3
• Positive Sentiment: Lincoln said it expects share repurchases to ramp up from an initial $50 million, offering a potential source of support for shareholder returns. Lincoln Financial anticipates RPS outflows as buybacks ramp
• Negative Sentiment: Adjusted earnings were $1.72 per share, below the $1.96 consensus estimate and down from $2.04 a year earlier. The earnings shortfall and year-over-year decline likely weighed on sentiment despite the revenue beat. Lincoln National Q3 Earnings Lag Estimates
• Negative Sentiment: Lincoln anticipates about $3 billion in net outflows from Retirement Plan Services (RPS) during Q4, a potential headwind to flows in the coming quarter. Lincoln Financial anticipates RPS outflows as buybacks ramp

Lincoln National Company Profile

Lincoln National Corporation, operating under the Lincoln Financial Group brand, is a financial services company that provides insurance and retirement products primarily in the United States. Its businesses are designed to help individuals, employers and institutions manage financial protection, income and long-term savings needs.

The company offers life insurance and annuities, including products intended to provide death-benefit protection, retirement income and asset accumulation. Through its group protection business, Lincoln also provides employer-sponsored disability, dental, vision and leave-management solutions, as well as related workplace benefits and services.

Lincoln traces its history to the founding of The Lincoln National Life Insurance Company in Fort Wayne, Indiana, in 1905.