Three Companies, Three Different Quarterly Income Results
May 11, 2015 by Cyril Tuohy, cyril.tuohy@innfeedback.com
Voya Financial reported first quarter 2015 net income of $186 million, a 28 percent drop from the year-ago period, due to after-tax losses of $71 million.
The company announced an after-tax loss of $22 million in connection with its Closed Block Variable Annuity, and another $71 million in after-tax losses connected to hedging and expenses related to the spinoff and restructuring of Voya from ING Group.
The company also reported first quarter after-tax operating earnings of $197 million, or $0.82 cents per diluted share, compared with $150 million, or $0.57 cents per diluted share reported in the year-ago period.
After-tax operating earnings easily beat Zacks Investment Research analysts’ estimates of $0.75 cents per share.
Higher after-tax operating earnings were due to retirement, annuities, individual life and employee benefits business segments, the company said. Revenue from those segments rose 21 percent to $324 million in the first quarter.
Chairman and CEO Rod Martin, in a conference with analysts this week, said the company had reached important milestones over the past several months.
Included in those milestones was the exit of ING Group two years earlier than planned, ratings agency upgrades, a rebranding campaign and the hiring of Charlie Nelson as the company’s new CEO of the retirement segment.
Prudential
Prudential, which ended the year on a sour note in the wake of interest rate declines, reported first quarter net income of $2.03 billion, a 64 percent increase compared with the year-ago period.
The company also said its revenue had increased nearly 8 percent to $11.8 billion.
After-tax adjusted operating income of $2.79 per share diluted was in-line with estimates from Zacks Investment Research, the company also reported.
Chairman and CEO John Strangfeld said the results reflected “a strong start for the year.”
The company’s annuities, retirement and asset management businesses are benefiting from the growth in account values and assets under management, he said in a news release.
Prudential’s individual and group life segment reported first quarter operating income of $146 million compared with $131 million in the year-ago quarter. This year, the company took a pretax charge of $9 million for integration costs related to its acquisition of The Hartford’s life insurance business.
In the fourth quarter, Prudential reported a $1.5 billon drop in estimated excess capital capacity from earlier forecasts in December. Company executives blamed that drop on dropping interest rates and their impacts on “underhedges” used to manage a portion of the insurance giant’s variable annuity interest rate risk.
Declining rates triggered changes in Prudential’s capital requirements and sent managers scrambling for funds at the holding company level, company officials said in February.
Primerica
Primerica reported first quarter net income of $43.4 million, or $0.82 cents a share, compared with $45 million, or $0.81 cents a share, in year-ago period.
The company also reported net operating income of $42.5 million, or $0.80 cents per share diluted, compared with $43.3 million, or $0.77 centers per share in the year-ago period. Zacks Investment Research consensus estimated income at $0.83 cents per share.
Operating revenues were $324.1 million, an increase of 6 percent over the year-ago period. Overall operating revenues were helped by term life operating revenues, which grew to $198.4 million in the first quarter, an increase of 8 percent over the year-ago period, the company also said.
CEO Glenn Williams said in a news release that compared with the first quarter last year, the company this year saw growth in the size of the life insurance-licensed sales force and the number of new sales recruits.
At the end of the first quarter, the number of life insurance-licensed agents rose to 98,145, an increase of 3 percent compared with the year-ago period, the company said. The number of new representatives also grew by 10 percent over last year, as new reps were attracted with the help of a special incentive programs.
