May 08--Chattanoga-based Unum Group continued to rake in profits during the first quarter, beating analyst expectations by 3 cents per share.
The disability insurer reported after-tax operating income of $228.9 million, or 88 cents per diluted share, a significant gain from the $212.7 million, or 79 cents per diluted share, that the company earned in the first quarter of 2013.
"We are off to a strong start in 2014, as we continue to generate solid operating results in our core business lines and actively manage our capital through our share repurchase program," said Tom Watjen, president and CEO of Unum. "As a result, we generated good growth in operating earnings and book value per share again this quarter."
Though Unum continued to grow its profits, total revenue slid slightly to $2.6 billion from $2.61 billion in the first quarter of 2013.
However, the company overcame the soft economy by buying back its own stock, thereby dividing its income among a smaller number of shares, and by cutting costs. The insurer bought back $100 million of its own stock during the quarter, or almost 4 percent of its outstanding shares in the previous year.
Operating income grew across the board at the company's various divisions, which cover the U.S. and UK business and consumer market, as well as Unum's discontinued lines of business.
Operating income from the Unum U.S. division, which represents the biggest chunk of Unum's profits, rose slightly to $210.8 million, with sales rising 7.2 percent during the first quarter.
The once-ailing Unum UK division boosted operating income 9 percent to $36.5 million through price increases, while Unum's Colonial Life division grew operating income 5.3 percent to $79.4 million.
Even the company's Closed Block, which represents lines of business that the insurer no longer sells, increased operating income to $29.1 million from $27.3 million in the first quarter of 2013.
"I'm encouraged by the ongoing consistency of our operating results, as well as the sales growth and momentum we have generated," Watjen wrote in a letter to employees. "Our focus going forward remains on continuing to profitably grow our business through disciplined pricing, underwriting and expense management -- principles that continue to serve us very well."
Unum's stock closed Wednesday at $33.42 per share, up 52 cents or 1.57 percent.
Contact staff writer Ellis Smith at 423-757-6315 or [email protected] with tips or documents.
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