StanCorp Financial Group, Inc. (SFG) on Wednesday reported a profit for the fourth quarter that more than doubled from last year, primarily reflecting favorable earnings in the asset management segment partially offset by lower premiums in the insurance services segment. Excluding items, adjusted earnings per share for the latest quarter beat analysts' consensus estimate. Looking ahead to fiscal year 2010, the company forecasts return on average equity toward the lower end of its target range of 14%-15%, due to the low interest rate environment.
StanCorp's net income for the fourth quarter rose to $60.0 million or $1.23 per share from $24.0 million or $0.49 per share in the year-ago period.
The company recorded after-tax net capital gains of $0.7 million for the fourth quarter, compared to after-tax net capital losses of $35.0 million in the same period last year. The company recorded one-time costs of $0.6 million after-tax for the latest quarter for severance costs and other expenses associated with enhancing operating efficiencies.
Excluding after-tax one-time costs and after-tax net capital gains and losses, non-GAAP net income for the latest quarter increased to $1.23 per share from $1.20 per share in the prior-year quarter. On average, eleven analysts polled by Thomson Reuters expected the company to report earnings of $1.21 per share for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues for the fourth quarter increased to $688.7 million from $638.8 million in the year-ago period, but missed analysts' consensus revenue estimate of $695.45 million for the quarter.
Total premiums declined to $510.9 million from $528.0 million last year, while total administrative fees increased to $29.5 million from $26.0 million a year ago. Total investment income grew to $147.4 million from $138.8 million in the prior-year period..
The Insurance Services segment reported income before income taxes of $85.1 million for the latest quarter, down from $94.8 million a year ago, primarily due to comparatively lower premiums in its group insurance business and higher benefits to policyholders in its individual disability business. Premiums for the Insurance Services segment decreased 2.4% to $506.2 million from $518.7 million in the same period last year.
The Asset Management segment reported income before income taxes of $14.1 million for the quarter, up from $3.2 million in the year-ago period, primarily reflecting an increase in administrative fee revenues from the company's retirement plans business due to positive equity market performance and positive net cash flows, and also reflecting lower operating expenses.
Total benefits and expenses for the quarter declined to $597.4 million from $602.6 million in the prior-year period.
For fiscal year 2009, the company's net income rose to $208.9 million or $4.26 per share from $162.9 million or $3.30 per share a year ago.
After-tax net capital losses for the year were $17.3 million, compared to after-tax net capital losses of $83.4 million in the prior year. The company also recorded one-time costs in the year totaling $12.0 million after-tax, for severance costs and other expenses associated with enhancing the company's operating efficiencies.
Net income for the year, excluding after-tax one-time costs and after-tax net capital gains and losses, declined to $4.86 per share from $5.00 per share in the previous year. The decrease in net income was primarily due to comparatively lower premiums in the group insurance business, partially offset by higher earnings in the Asset Management segment.
Total revenues for the year rose to $2.77 billion from $2.67 billion in the prior year.
The company reported return on average equity for the full year, excluding after-tax one-time costs and after-tax net capital gains and losses from net income and accumulated other comprehensive income and losses from equity, of 14.9%.
For the fourth quarter of 2009 and full year 2009, the company repurchased approximately 1.6 million shares at a total cost of $59.3 million. At December 31, 2009, the company had approximately 1.3 million shares remaining under its repurchase program, which expires on December 31, 2011.
For fiscal year 2010, the company forecasts return on average equity, excluding after-tax net capital gains and losses from net income and accumulated other comprehensive income and losses from equity, to be toward the lower end of its target range of 14%-15% due to the low interest rate environment.
The company expects flat to low single digit premium growth as a percentage of 2009 premiums due to a continued challenging economic environment.
Greg Ness, president and chief executive officer of StanCorp Financial said, "As we start 2010, we are well positioned for growth when economic conditions improve. We are highly encouraged by the quoting activity we are seeing in our employee benefits business and with the sales we have seen during the first part of January."
SFG closed Wednesday's regular trading session at $42.29, up $0.89 or 2.15% on a volume of 0.47 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.