Lincoln National (NYSE:LNC) Issues Quarterly Earnings Results, Beats Expectations By $0.28 EPS

Lincoln National (NYSE:LNC) announced its quarterly earnings results on Thursday. The financial services provider reported $2.24 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.96 by $0.28, FiscalAI reports. The firm had revenue of $4.93 billion during the quarter, compared to the consensus estimate of $4.89 billion. Lincoln National had a return on equity of 18.07% and a net margin of 9.17%.The firm’s quarterly revenue was up 12.3% compared to the same quarter last year. During the same period in the prior year, the company posted $2.36 earnings per share.

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

• Adjusted operating income rose 3% year over year to $439 million, marking Lincoln Financial’s eighth consecutive quarter of annual earnings growth. Retirement Plan Services earnings increased 32%, while Life Insurance earnings benefited from favorable mortality.
• Lincoln agreed to reinsure approximately $5.8 billion of legacy Guaranteed Universal Life reserves with Talcott, reducing long-term mortality, lapse, and interest-rate risk. The transaction is expected to increase annual free cash flow by roughly $30 million to $40 million and close in the fourth quarter, subject to regulatory approval.
• Capital flexibility improved as holding-company cash net of prefunding reached about $900 million, the company issued $500 million of hybrid securities, and half of its preferred stock obligations was prefunded. Management said its existing share-repurchase authorization has been reconfirmed, though it did not provide timing for resuming buybacks.
• Results faced several offsets, including alternative-investment returns of approximately 4.9% versus a 10% target, $2.9 billion of annuity net outflows, and $2.4 billion of Retirement Plan Services outflows from unprofitable plan exits. Group Protection earnings and margins also declined year over year as unusually favorable disability experience normalized.

Lincoln National Stock Performance

Shares of Lincoln National stock traded up $4.62 during trading hours on Thursday, hitting $46.05. 5,837,229 shares of the company were exchanged, compared to its average volume of 1,822,970. The company has a current ratio of 0.25, a quick ratio of 0.25 and a debt-to-equity ratio of 0.65. The business has a 50-day moving average of $38.04 and a 200-day moving average of $37.40. Lincoln National has a 1 year low of $32.18 and a 1 year high of $46.82. The stock has a market capitalization of $8.81 billion, a price-to-earnings ratio of 5.34, a P/E/G ratio of 2.93 and a beta of 1.17.

Lincoln National Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Monday, August 3rd. Stockholders of record on Friday, July 10th will be issued a $0.45 dividend. The ex-dividend date of this dividend is Friday, July 10th. This represents a $1.80 dividend on an annualized basis and a dividend yield of 3.9%. Lincoln National’s payout ratio is presently 20.88%.

Insider Activity at Lincoln National

In other news, EVP Craigt T. Beazer sold 30,000 shares of the business’s stock in a transaction dated Friday, June 5th. The shares were sold at an average price of $34.45, for a total transaction of $1,033,500.00. Following the transaction, the executive vice president directly owned 103,906 shares in the company, valued at $3,579,561.70. The trade was a 22.40% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Company insiders own 1.03% of the company’s stock.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of LNC. Dimensional Fund Advisors LP grew its stake in shares of Lincoln National by 8.8% during the 4th quarter. Dimensional Fund Advisors LP now owns 6,233,327 shares of the financial services provider’s stock worth $277,574,000 after purchasing an additional 502,600 shares during the period. State Street Corp boosted its holdings in Lincoln National by 0.7% during the second quarter. State Street Corp now owns 6,199,526 shares of the financial services provider’s stock worth $214,504,000 after buying an additional 40,676 shares in the last quarter. Charles Schwab Investment Management Inc. grew its position in Lincoln National by 0.5% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 2,077,984 shares of the financial services provider’s stock worth $92,533,000 after buying an additional 10,768 shares during the period. AQR Capital Management LLC increased its holdings in Lincoln National by 48.2% in the fourth quarter. AQR Capital Management LLC now owns 1,214,186 shares of the financial services provider’s stock valued at $54,068,000 after buying an additional 395,171 shares in the last quarter. Finally, Bank of America Corp DE lifted its position in shares of Lincoln National by 9.2% during the 2nd quarter. Bank of America Corp DE now owns 1,213,245 shares of the financial services provider’s stock valued at $41,978,000 after acquiring an additional 101,793 shares during the period. Hedge funds and other institutional investors own 72.81% of the company’s stock.

Analysts Set New Price Targets

Several brokerages have recently weighed in on LNC. Weiss Ratings downgraded shares of Lincoln National from a “buy (b-)” rating to a “hold (c)” rating in a research report on Monday, May 11th. Keefe, Bruyette & Woods boosted their price target on shares of Lincoln National from $44.00 to $46.00 and gave the company an “outperform” rating in a research report on Monday, July 13th. UBS Group raised their price objective on Lincoln National from $39.00 to $44.00 and gave the stock a “neutral” rating in a report on Wednesday, July 8th. Mizuho boosted their target price on Lincoln National from $48.00 to $51.00 and gave the company an “outperform” rating in a report on Thursday, July 9th. Finally, TD Cowen upped their target price on Lincoln National from $37.00 to $42.00 and gave the company a “hold” rating in a research report on Wednesday, July 22nd. Six equities research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has a consensus rating of “Hold” and an average target price of $45.93.

About Lincoln National

Lincoln National Corporation, doing business as Lincoln Financial Group, is a diversified financial services holding company focused on providing retirement, insurance, and wealth management solutions in the United States and select international markets. Headquartered in Radnor, Pennsylvania, the company operates through several business segments, including Retirement Plan Services, Life Insurance, and Group Protection. Its offerings are designed to help individuals, families, and institutions plan and prepare for their financial futures.

The Retirement Plan Services segment delivers recordkeeping, administrative services, and investment management for defined contribution and defined benefit plans.