Yahoo Finance CNO Financial's (CNO) Q1 Earnings Miss on Increased Expenses
CNO Financial Group, Inc. CNO reported first-quarter 2023 adjusted earnings per share (EPS) of 51 cents, which missed the Zacks Consensus Estimate of 65 cents and our estimate of 54 cents. Also, the bottom line dropped 6% year over year.
Total revenues jumped 19.3% year over year to $1,006 million in the quarter under review. The top line beat the consensus mark by 9.5% and our estimate of $911.8 million.
The weak quarterly earnings were caused by a massive increase in benefits and expenses, partially offset by improved annuity collected premiums, higher direct-to-consumer life sales and increased net investment income.
CNO Financial Group, Inc. Price, Consensus and EPS Surprise
CNO Financial Group, Inc. price-consensus-eps-surprise-chart | CNO Financial Group, Inc. Quote
Quarterly Performance
Insurance policy income of $625.5 million rose 0.1% year over year but fell shy of our estimate of $638.2 million.
CNO’s net investment income increased 65% year over year to $343 million in the first quarter.
Annuity collected premiums of $370.9 million rose 1% year over year. New annualized premiums for health and life products advanced 7% year over year to $96.6 million.
Total benefits and expenses came in at $1,007 million, which jumped 67.1% year over year in the first quarter. The increase in the metric was attributable to higher insurance policy benefits, interest expenses and other operating costs.
Financial Update (as of Mar 31, 2023)
CNO Financial exited the first quarter with unrestricted cash and cash equivalents of $425 million, which tumbled from the 2022-end level of $575.7 million.
Total assets of $34,015 million rose from $33,133.1 million at 2022 end.
Total shareholders’ equity jumped to $2,031.8 million from $1,768.8 million as of Dec 31, 2022.
Book value per diluted share declined to $17.49 in the first quarter from $23.58 a year ago.
Adjusted operating return on equity came in at 10.3%, which deteriorated 190 basis points year over year.
The debt-to-capital ratio was 35.9% at the first-quarter end.
Share Repurchase and Dividend Update
CNO Financial rewarded its shareholders with $32.2 million in the form of share buybacks worth $15.1 million and dividends of $17.1 million.
As of Mar 31, 2023, the company had remaining repurchase funds of $171.8 million.
Forward View
CNO Financial continues to expect 2023 EPS within $2.80-$3, up from the year-ago level of $2.33.
It expects the expense ratio to be in the range of 19-19.4% for 2023, due to improvement in Life margin from the first-quarter level. It also expects expenses to decline in the coming quarters.
CNO anticipates the effective tax rate for the year to be within 23-24%.
Zacks Rank and Key Picks
CNO currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader finance space are Selective Insurance Group, Inc. SIGI, Conifer Holdings, Inc. CNFR and Owl Rock Capital Corporation ORCC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Selective Insurance’s 2023 earnings predicts 31% year-over-year growth. Over the past 30 days, SIGI has witnessed one upward estimate revision against none in the opposite direction.
The consensus mark for Conifer’s 2023 earnings indicates a 103.3% year-over-year improvement. The consensus estimate for CNFR’s bottom line has witnessed one upward revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Owl Rock Capital’s 2023 earnings suggests 24.8% year-over-year growth. Also, the consensus mark for ORCC’s revenues in 2023 suggests a 19.6% year-over-year rise.
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CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report
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