Unum Group (UNM) to Report Q4 Earnings: What's in the Cards?
Unum Group UNM is slated to report fourth-quarter 2021 earnings results on Feb 1, after market close. The company delivered a negative earnings surprise of 11.2% in the last reported quarter.
Factors to Note
The Unum U.S. segment is likely to have benefited from favorable trends for major product lines, higher sales in certain of group short-term disability products, growth in medical stop-loss products, higher sales in the dental and vision product line, and favorable new claim incidence trends. The Zacks Consensus Estimate for fourth-quarter premium income at the Unum U.S. segment is pegged at $1.5 billion, suggesting an improvement of 1.4% from the prior-year reported figure.
The Unum US group disability benefit ratio might have gained from continued high levels of STD claims.
Colonial Life is likely to have been aided by higher overall persistency, rising sales, improving miscellaneous investment income and an increasing level of invested assets. The Zacks Consensus Estimate for fourth-quarter premium income at the Colonial Life segment stands at $424 million, indicating an increase of 1.2% from the prior-year level.
A decline in the level of invested assets and a decrease in the yield on invested assets are likely to have weighed on net investment income. This downside may have been partially offset by higher miscellaneous investment income, particularly related to private equity partnerships. Unum Group does not expect the benefit from bond calls to net investment income to continue in the fourth quarter. The Zacks Consensus Estimate for the same is pegged at $534 million, indicating a 10.1% decline from the prior-year quarter.
Expenses are likely to have decreased due to lower benefits and change in reserves for future benefits, interest and debt expense, deferral of acquisition costs and compensation expense.
Unum Group expects the interest adjusted loss ratio for LTC to remain slightly favorable to long-term assumption range in the to-be-reported quarter, as mortality and incidence trends continue to normalize following the impacts of COVID-19.
The company anticipates COVID-related mortality to have risen further in the fourth quarter to approximately 100,000 nationwide deaths.
Continued share buyback is likely to have provided a boost to the bottom line.
Unum Group expects to commence a share repurchase program with the execution of an accelerated buyback of $50 million in the fourth quarter.
For Closed Disability Block, Unum Group estimates higher miscellaneous investment income owing to higher-than-average bond call premiums, as well as strong performance in alternative asset portfolio to drive adjusted operating income between $45 million and $55 million.
The Zacks Consensus Estimate for earnings per share is pegged at 81 cents, indicating a decline of 29.6% from the year-ago reported figure.
Quantitative Model Prediction
Our proven model predicts an earnings beat for Unum Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. This is not the case as you can see below.
Earnings ESP: It has an Earnings ESP of +0.31%. This is because the Most Accurate Estimate is pegged at 82 cents, higher than the Zacks Consensus Estimate of 81 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Unum Group Price and EPS Surprise
Unum Group price-eps-surprise | Unum Group Quote
Zacks Rank: Unum Group currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some stocks from the insurance space that have the perfect mix of elements to surpass earnings estimates in the upcoming quarterly releases are as follows:
Aflac Incorporated AFL has an Earnings ESP of +4.74% and a Zacks Rank #3. The Zacks Consensus Estimate for Aflac Incorporated’s 2022 earnings has moved north by 0.2% in the past 30 days.
AFL’s expected long-term earnings growth rate is pegged at 5%. AFL’s earnings surpassed estimates in each of the last four quarters, the average beat being 18.3%.
Arch Capital Group ACGL has an Earnings ESP of +1.48% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for ACGL’s 2022 earnings implies a year-over-year increase of 31.5%.
Arch Capital Group’s earnings surpassed estimates in each of the last four quarters, the average surprise being 32.7%. The Zacks Consensus Estimate for ACGL’s 2022 earnings has moved north by 1.1% in the past 30 days.
Allstate ALL has an Earnings ESP of +2.86% and a Zacks Rank #3. The Zacks Consensus Estimate for ALL’s 2022 earnings has moved north by 0.7% in the past 30 days.
Allstate’s earnings surpassed estimates in three of the last four quarters and missed once, the average surprise being 21%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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