Lincoln National (NYSE:LNC) Posts Earnings Results, Beats Estimates By $0.28 EPS

Lincoln National (NYSE:LNC) released its quarterly earnings results on Thursday. The financial services provider reported $2.24 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.96 by $0.28, FiscalAI reports. The business 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 business’s revenue was up 12.3% on a year-over-year basis. During the same quarter in the previous year, the company posted $2.36 EPS.

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 Trading Up 11.2%

Shares of LNC traded up $4.62 during mid-day trading on Thursday, reaching $46.05. The company had a trading volume of 5,837,229 shares, compared to its average volume of 1,822,970. Lincoln National has a fifty-two week low of $32.18 and a fifty-two week high of $46.82. The firm has a fifty day simple moving average of $38.04 and a 200-day simple moving average of $37.40. The stock has a market cap of $8.81 billion, a price-to-earnings ratio of 5.34, a price-to-earnings-growth ratio of 2.93 and a beta of 1.17. The company has a current ratio of 0.25, a quick ratio of 0.25 and a debt-to-equity ratio of 0.65.

Lincoln National Announces Dividend

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

Wall Street Analyst Weigh In

Several brokerages have issued reports on LNC. Morgan Stanley reduced their price target on shares of Lincoln National from $43.00 to $40.00 and set an “overweight” rating on the stock in a report on Thursday, May 21st. Keefe, Bruyette & Woods raised their price target on shares of Lincoln National from $44.00 to $46.00 and gave the stock an “outperform” rating in a research note on Monday, July 13th. JPMorgan Chase & Co. boosted their price objective on shares of Lincoln National from $40.00 to $42.00 and gave the company an “underweight” rating in a research report on Tuesday, July 21st. UBS Group lifted their target price on shares of Lincoln National from $39.00 to $44.00 and gave the stock a “neutral” rating in a research note on Wednesday, July 8th. Finally, TD Cowen raised their price objective on Lincoln National from $37.00 to $42.00 and gave the stock a “hold” rating in a report on Wednesday, July 22nd. Six investment analysts have rated the stock with a Buy rating, eight have given a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $45.93.

Insider Buying and Selling at Lincoln National

In related news, EVP Craigt T. Beazer sold 30,000 shares of Lincoln National stock in a transaction on Friday, June 5th. The stock was sold at an average price of $34.45, for a total value of $1,033,500.00. Following the transaction, the executive vice president owned 103,906 shares in the company, valued at approximately $3,579,561.70. This trade represents a 22.40% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Company insiders own 1.03% of the company’s stock.

Institutional Trading of Lincoln National

A number of institutional investors and hedge funds have recently bought and sold shares of LNC. Marshall Wace LLP purchased a new stake in Lincoln National during the third quarter worth approximately $29,831,000. Jain Global LLC purchased a new position in Lincoln National in the fourth quarter valued at about $23,067,000. Alyeska Investment Group L.P. raised its position in Lincoln National by 2,490.3% in the fourth quarter. Alyeska Investment Group L.P. now owns 530,693 shares of the financial services provider’s stock valued at $23,632,000 after purchasing an additional 510,205 shares during the period. Dimensional Fund Advisors LP lifted its stake in shares of Lincoln National by 8.8% during the fourth 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 in the last quarter. Finally, Mackenzie Financial Corp grew its stake in shares of Lincoln National by 1,532.3% in the fourth quarter. Mackenzie Financial Corp now owns 533,823 shares of the financial services provider’s stock valued at $23,927,000 after buying an additional 501,120 shares in the last quarter. Institutional investors and hedge funds own 72.81% of the company’s stock.

Lincoln National Company Profile

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.