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FBL Financial (FFG) Q4 Earnings, Revenues Miss Estimates

Zacks

FBL Financial Group, Inc. FFG reported fourth-quarter operating earnings of 99 cents per share, which missed the Zacks Consensus Estimate of $1.05 by 5.71%. Also, the bottom line decreased 2.9% due to lower premiums and higher expenses.

FBL Financial Group, Inc. Price, Consensus and EPS Surprise

FBL Financial Group, Inc. Price, Consensus and EPS Surprise | FBL Financial Group, Inc. Quote


Including benefits of $3.42 per share from the Tax Cuts and Jobs Act of 2017, gains from other investment-related income of 13 cents, lower interest sensitive product charges as well as higher benefit reserves totaling 10 cents, net income came in at $4.33, increasing more than fourfold year over year.

Behind the Headlines

Revenues of $183 million missed the Zacks Consensus Estimate of $185 million by 0.84%. The top line slipped 0.6% year over year, mainly on higher investment income.

FBL Financial’s total premiums collected were $153.7 million, down 11.3% year over year. Premiums and product charges decreased 3.3% to $75.8million in the quarter under review. Interest sensitive products charges were down 9.2% year over year to $26.3 million while traditional life insurance premiums inched up 0.1% year over year to $49.5 million.

Investment income improved 5.7% year over year to $107.3 million in the reported quarter owing to a rise in average invested assets as well as an increase in other investment-related income. As of Dec 31, 2017, 97% of fixed maturity securities in the company’s portfolio accounted for investment grade debt securities.

Total benefits and expenses increased nearly 3% to $153.4 million in the quarter, mainly due to higher interest sensitive product benefits, underwriting, acquisition and insurance expenses plus other expenses.

Full-Year Highlights

FBL Financial posted adjusted earnings of $4.32 per share on revenues of $735.5 million. While the top line improved 1.2%, the bottom line increased 1.6% over the figures recorded in 2016.

Financial Update

As of Dec 31, 2017, book value per share was $55.59 compared with $47.61 as of Dec 31, 2016. Excluding accumulated other comprehensive income, the metric was $46.09 at the reported quarter-end compared with $41.60 at 2016-end.

Cash and cash equivalents of $52.7 million at 2017-end improved from $33.6 million at 2016-end. Total investments increased to $8.6 billion as of Dec 31, 2017 from $8.2 billion at year-end 2016.

The company exited 2017 with total assets of $10.1 billion, up from $9.7 billion at year-end 2016. Debt level remained flat at $97 million compared with the level as of Dec 31, 2016.

During the quarter under discussion, the company bought back 3511 shares. It has $49.2 million remaining under its stock repurchase program.

Zacks Rank

FBL Financial 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 Insurers

Among other firms from the insurance industry that have reported fourth-quarter earnings so far, the bottom line of The Progressive Corporation PGR, The Travelers Companies, Inc. TRV and RLI Corp. RLI surpassed the respective Zacks Consensus Estimate.

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