Market Overview

TORCHMARK CORPORATION REPORTS Second Quarter 2019 Results

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MCKINNEY, Texas, July 24, 2019 /PRNewswire/ -- Torchmark Corporation (NYSE:TMK) reported today that for the quarter ended June 30, 2019, net income was $1.67 per diluted common share, compared with $1.59 per diluted common share for the year-ago quarter. Net operating income for the quarter was $1.67 per diluted common share, compared with $1.51 per diluted common share for the year-ago quarter.

Torchmark also announced today that its corporate name will be changed to Globe Life Inc. effective August 8, 2019. The NYSE ticker will be changed to GL on August 9, 2019. The name change is part of a brand alignment strategy which will enhance the Company's ability to build name recognition with potential customers and agent recruits through use of a single brand. The underwriting companies owned by the Parent Company will continue to exist as legal entities, but over a period of time will go to market under the Globe Life name to leverage branding initiatives implemented at Globe Life And Accident Insurance Company in recent years.

HIGHLIGHTS:

  • Net income as an ROE was 12.3%. Net operating income as an ROE excluding net unrealized gains on fixed maturities was 14.6%.
  • Life underwriting margin at American Income Exclusive Agency and Globe Life Direct Response both increased over the year-ago quarter by 9%.
  • Health underwriting margin at Family Heritage Exclusive Agency increased over the year-ago quarter by 14%.
  • Life premiums increased over the year-ago quarter by 7% at American Income Exclusive Agency and health premiums increased over the year-ago quarter by 8% at Family Heritage Exclusive Agency.
  • Net health sales increased over the year-ago quarter by 14%.
  • 979,215 shares of common stock were repurchased during the quarter.

RESULTS OF OPERATIONS

Net operating income, a non-GAAP(1) financial measure, has been used consistently by Torchmark's management for many years to evaluate the operating performance of the Company, and is a measure commonly used in the life insurance industry. It differs from net income primarily because it excludes certain non-operating items such as realized investment gains and losses and certain significant and unusual items included in net income. Management believes an analysis of net operating income is important in understanding the profitability and operating trends of the Company's business. Net income is the most directly comparable GAAP measure.

The following table represents Torchmark's operating summary for the three months ended June 30, 2019 and 2018:

Operating Summary


Per Share








Three Months Ended
June 30,




Three Months Ended
June 30,




2019


2018


%
Chg.


2019


2018


%
Chg.

Insurance underwriting income(2)

$

1.60



$

1.46



10


$

178,556



$

168,446



6

Excess investment income(2)

0.58



0.52



12


64,678



59,949



8

Parent company expense

(0.03)



(0.02)





(2,872)



(2,847)




Income tax

(0.42)



(0.38)



11


(47,114)



(44,251)



6

Stock compensation benefit (expense), net of tax

(0.06)



(0.05)





(6,366)



(6,237)




Net operating income

1.67



1.51



11


186,882



175,060



7













Reconciling items, net of tax:












Realized Gain (Loss)—Investments

0.04



0.08





4,072



9,333




Part D adjustments—Discontinued operations







(43)



32




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