Wednesday, Unum Group (UNM), a group and individual disability insurance products provider, reported a moderate increase in first quarter earnings, despite a decrease in revenues, helped by strong segmental operating income. Further, the company reiterated its earnings forecast for the full year.
For the first quarter, net income of Chattanooga, Tennessee-based Unum improved to $164.9 million or $0.50 per share, up from $163.1 million or $0.46 per share in the year-ago quarter. Fifteen analysts polled by Thomson Reuters expected the company to earn $0.60 per share for the quarter. Analysts' estimates typically exclude special items.
Results for the recent quarter include a net realized after-tax investment loss of $41.8 million or $0.12 per share, compared to net realized after-tax investment losses of $44.7 million or $0.13 per common share in the first quarter of 2008. The net realized after-tax investment losses related to the sale or write-down of securities was $57.2 million in the quarter, compared to $3.1 million in the same period last year.
Total revenues declined to $2.449 billion from $2.541 billion in the previous year quarter. Six analysts estimated revenues of $2.57 billion for the quarter.
Thomas Watjen, President and Chief Executive Officer said, "Unum's solid first quarter demonstrates our ability to produce strong results during very difficult economic and financial market times."
"Each of our businesses performed well as we continue to benefit from the actions we have taken over the past several years to create a more balanced, disciplined business, with an emphasis on sound risk and capital management," Watjen added.
Segment wise, Unum US reported increased operating income of $183.6 million in the quarter, compared to $158.3 million in the prior-year quarter. Meanwhile, Unum UK reported operating income of $62.3 million, a 26.1% decrease compared to $84.3 million in the same period last year. In local currency, operating income for the quarter increased 1.6% to GBP 43.3 million from GBP 42.6 million in the same period last year.
Colonial Life reported a 5.2% increase in operating income to $70.9 million in the quarter, compared to $67.4 million in the same period last year. The Corporate and Other segment reported an operating loss of $12.9 million in the quarter, compared to operating income of $0.3 million a year ago.
Interest and debt expense was $26.0 million for the quarter, compared to $31.7 million in the first quarter of 2008.
The company noted that given the current economic environment, there remains a potential for further volatility in foreign exchange rates through 2009.
In addition, the company said it is maintaining its previous guidance for full year 2009 and anticipates operating earnings in the range of $2.45 - $2.55 per share. The Street currently expects earnings of $2.46 per share for the year.
Amongst peers, health and life insurance service provider Aflac Inc. (AFL) reported a first quarter profit that rose from the prior-year period, helped by after-tax investment gains and higher revenues, reflecting strong yen/dollar exchange rate. First quarter earnings of Aflac increased 20% to $569 million from $474 million in the same quarter a year ago. On a per share basis, earnings were up 24.5% to $1.22 from $0.98 in the year-earlier quarter. Quarterly revenues rose 12.9% to $4.82 billion from $4.27 billion a year ago. Aflac revised full year 2009 earnings forecast, while providing second quarter earnings outlook.
UNM closed Wednesday's trading at $16.11, up $0.81 or 5.29%, on a volume of about 5.15 million shares. In the after hours, the shares traded at $16.03, down $0.08 or 0.51%.
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