Unum Income Dips In Quarter Despite Rise In Premium Revenue

Unum Group reported a slight drop in its adjusted operating earnings for the third quarter compared with a year ago, missing the analysts average forecast for the period by a penny per share.

The Chattanooga-based insurance giant said Tuesday its after-tax adjusted operating income in the three months ended Sept. 30 totaled $282.7 million, or $1.36 per diluted share. In the same period a year ago, Unum after-tax operating income totaled $300.6 million, or $1.37 per share.

The Zacks Consensus Estimate for earnings for Unum in the third quarter was $1.37 per share, or no change from the year-ago quarter.

"Our operating business segments generated solid results in the third quarter, with good top-line growth and profit margins," Unum CEO Richard P. McKenney said in the company's earnings announcement after the market closed. "We are continuing to serve more customers and are investing in talent and technology as we grow to provide protection for more workers and their families."

A year ago, Unum took a major chargeoff of $593.1 million, or $2.71 per share, for anticipated losses for its long-term care product line in its closed book of business. That generated a net loss for the company in the third quarter of 2018 of $284.7 million, or $1.30 per share.

In the third quarter this year, Unum's net income was $242.0 million, or $1.16 per diluted common share.

Included in net income for the third quarter of this year re after-tax costs related to the early retirement of debt of $19.9 million, or 10 cents per share, offset by a net after-tax realized investment loss on the company's investment portfolio of $20.8 million, also 10 cents per share.

Unum US reported adjusted operating income of $261.4 million in the third quarter of 2019, a decrease of 3.5 percent from $270.9 million in the third quarter of 2018. Premium income for the segment increased 3.9 percent to over $1.5 billion. Net investment income for the segment declined 8 percent to $184.2 million in the third quarter of 2019, compared to $200.3 million in the third quarter of 2018.

The Unum International segment reported adjusted operating income of $24.2 million in the third quarter of 2019, a decrease of 7.3 percent from $26.1 million in the third quarter of 2018.

Ahead of Tuesday's earnings release, Unum shares traded higher, rising to $28.70 per share in trading on the New York Stock Exchange. Unum's share price is up only 1.2% so far this year and those gains were being given up Tuesday night in after-market trading of the stock. Unum's share price remains about 18% below a year ago.

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