Protective Life's Earnings Soar on Rev Growth - Analyst Blog

Protective Life Corp. PL reported first-quarter 2014 net operating earnings of $1.19 per share, 4 cents ahead of the Zacks Consensus Estimate. On  year-over-year basis, earnings surged 34% after a super performance by its Annuity and Stable Value lines that was partly dampened by higher mortality in Life Marketing, and soft Acquisitions and Annuities businesses.

 

Total revenue in the quarter amounted to $1.1 billion, up 16.9% year over year on higher net premium and net investment income. Reported revenues also were also in line with the Zacks Consensus Estimate.

 

Net investment income of Protective Life came in at $538.0 million, up 17.5% year over year.

 

Total benefits and expenses came in at $965.4 million, reflecting an increase of 18.4% year over year.

 

Segment Details

 

Protective Life's Life Marketing segment reported before-tax operating income of $23.5 million, down 1% year over year due to unfavorable mortality against the prior-year quarter. Sales came in at $28.3 million, down 40% year over year.

 

Before-tax, operating income of Acquisitions was $61.0 million, up 77% year over year. The increase was primarily attributable to the addition of MONY Life Insurance Company which contributed $25.7 million to operating earnings.

 

Protective Life's Annuities segment reported before-tax operating income of $51.6 million, which increased 19% year over year. Annuities sale decreased 40% year over year to $416.4 million. 

 

Lower participating mortgage income resulted in a 3.0% year-over-year decline in pre-tax operating income at the  Stable Value segment to $17.4 million. The segment's sales, however, declined 77% year over year to $25.9 million.

 

Asset Protection reported before-tax operating income of $6.4 million, which grew 5% year over year. The increase was primarily toadied by higher service contract earnings. Sales increased 1% year over year to $105.5 million. 

 

Corporate & Other pre-tax operating loss was $14.9 million compared with loss of $18.3 million in the year-ago quarter.

 

Share Repurchase Update

 

During the reported quarter, Protective Life did not make any share repurchase and has shares worth $170 million remaining under its authorization. 

 

Our Take

 

For 2014, we expect Protective Life to benefit from the successful integration of the MONY acquisition, retail growth innovation, focus on careful and rational allocation of capital and constant attention to rigorous expense management. 

 

Protective Life presently carries a Zacks Rank #3 (Hold). 

 

Other Stocks

 

Other life insurance players stocks like American International Group, Inc. AIG and Prudential Financial Inc. PRU reported favorable first quarter earnings, each beating the Zacks Consensus Estimate  by 13 cents. Yet another player MetLife Inc. MET missed the Zacks Consensus Estimate by 3 cents per share.