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Primerica (PRI) Earnings Beat, Revenues Miss Estimates in Q3


Primerica, Inc. PRI reported third-quarter 2017 operating income of $1.46 per share, beating the Zacks Consensus Estimate of $1.37 by nearly 6.6%. Also, the bottom line improved 19% year over year.

The quarter witnessed solid results at both Term Life Insurance and Investment and Savings Products. Share buybacks too offered an additional upside to the bottom line.

Primerica, Inc. Price, Consensus and EPS Surprise

Operational Update

Operating revenues grew 11% year over year to $427.3 million on higher net premiums, investment income, and commissions and fees. However, the top line missed the Zacks Consensus Estimate by 0.6%.

While Term Life Insurance revenues increased 15% to $256.2 million year over year, Investment and Savings Products revenues improved 8% to $140.1 million. Meanwhile, Corporate and Other Distributed Products revenues remained flat year over year.

The quarter witnessed 8% increase in the size of life insurance sales force, 4% growth in life insurance policies issued and 7% increase in Investment and Savings product sale.

Total benefits and expenses of $327.1 million were up 10.8 % year over year due to higher benefits and claims, amortization of deferred policy acquisition costs, sales commissions, insurance commissions and other operating expenses.

Adjusted operating income before taxes increased 13% year over year on 14% higher operating income at Term Life Insurance and 9% growth at Investment and Savings Products.

Financial Update

Cash and cash equivalents were $177.7 million as of Sep 30, 2017, down 16.3% from Dec 31, 2016.

Total investments were $2.7 billion, up 12.5% from Dec 31, 2016.

Notes payable were $373 million, almost flat with the level at 2016-end.

Adjusted stockholders’ equity totaled $1.2 billion, up 4.2% from the level on Dec 31, 2016.

Primerica Life Insurance Company’s statutory risk-based capital (RBC) ratio was about 440% as of Sep 30, 2017.

Return on equity stood at 21.7% in the third quarter.

Share Repurchase Update

Primerica spent $57.7 million to buy back 0.7 million shares in the quarter taking the year-to-date tally to 1.9 million shares, bought back for $150 million.

Zacks Rank

Primerica carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Among other players from the life insurance industry that have reported third-quarter earnings so far, the bottom line of Lincoln National Corporation LNC, Torchmark Corporation TMK and Reinsurance Group of America, Incorporated RGA beat the respective Zacks Consensus Estimate.

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