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American Equity (AEL) Q1 Earnings Miss, Revenues Rise Y/Y

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American Equity Investment Life Holding Company AEL reported first-quarter 2022 adjusted net earnings of 92 cents per share, which missed the Zacks Consensus Estimate by 3.1%. The bottom line however increased two-fold on a year-over-year basis.

American Equity witnessed higher net investment income, offset by lower premiums and annuity product charges.

American Equity Investment Life Holding Company Price, Consensus and EPS Surprise

American Equity Investment Life Holding Company Price, Consensus and EPS Surprise
American Equity Investment Life Holding Company Price, Consensus and EPS Surprise

American Equity Investment Life Holding Company price-consensus-eps-surprise-chart | American Equity Investment Life Holding Company Quote

Operational Update

Operating total revenues were $638.4 million, up 11.9% year over year on the back of higher net investment income and other revenues.

Premiums and other considerations decreased 23.7% year over year to $10.1 million. Annuity product charges decreased 12.9%.

Net investment income increased 14.1% on a year-over-year basis to $567.4 million. The upside was due to a higher average yield on investments, resulting from strong returns from partnerships and other mark-to-market assets, lower cash balances as well as an increase in allocation to higher yielding privately sourced assets.

Total benefits and expenses were negative $573.5 million versus $600.9 million a year ago due to lower insurance policy benefits and change in future policy benefits, interest-sensitive and index product benefits and interest expense on subordinated debentures.

The investment spread was 2.51%, up from 2% in the year-ago quarter.

Financial Update

Cash and cash equivalents was $1.9 billion on Mar 31, 2022, which decreased 57.1% from 2021-end. Total investments were about $58.5 billion, which decreased 3% from 2021-end.

Notes payable totaled $496.4 million, marginally up 0.03% from 2021-end.

Book value per common share excluding AOCI was $46.38, up 13.7% from 2021-end.

Total debt/total capitalization was 10.2%, improving 120 basis points from 2021-end.

Operating return on equity excluding average AOCI was 11.8%.

Zacks Rank

American Equity currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Voya Financial, Inc. VOYA reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year.

Total revenues amounted to $1.5 billion against ($2 billion) in the year-ago quarter. Net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year. Premiums totaled $613 million versus ($5 billion) in the year-ago quarter.

Lincoln National Corporation LNC reported first-quarter 2022 adjusted earnings of $1.66 per share, which missed the Zacks Consensus Estimate of $1.97. Also, the bottom line declined from the prior-year figure of $1.82 per share.

Adjusted operating revenues decreased to $4,718 million for the first quarter from $4,762 million a year ago. Also, it missed the consensus mark of $4,768 million.

Aon plc AON reported first-quarter 2022 operating earnings of $4.83 per share, which missed the Zacks Consensus Estimate of $4.86. However, the bottom line climbed 13% year over year.

Total revenues improved 4% year over year to $3,670 million, which comprised organic revenue growth of 8%, partially offset by a 1% unfavorable impact from divestitures and a 3% unfavorable impact from foreign currency translation. The top line missed the consensus mark of $3,747 million.


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