FGL Holdings' FG fourth-quarter 2018 adjusted net income of 34 cents per share beat the Zacks Consensus Estimate by 21.4%. The bottom line doubled year over year on sustained solid performance across the business from invested asset growth, stable underlying net investment spreads and disciplined expense management.
Net loss was 70 cents per share attributable to mark-to-market volatility and realized losses related to portfolio reposition actions, wider than loss of 30 cents incurred a year ago.
Behind the Headlines
Operating revenues of $344 million surged nearly 83% year over year driven by higher premiums, net investment income as well as insurance and investment product fees and other.
Premiums of $9 million increased 28.6% year over year.
Net investment income was $295 million in the quarter, up 69.5%.
Total sales were $1 billion, up 16% year over year driven by expanding relationships with distribution partners, traction from new products and a comprehensive product portfolio that meets a broad range of consumer needs.
Total benefit and expenses were negative $20 million against with $314 million in the year-ago quarter.
Operating loss was $191 million against income of $48 million a year ago.
Annuity sales increased 54% to $957 million. This includes fixed indexed annuities sales of $667 million, up 44%.
Average assets under management jumped 4% year over year to $25.6 billion as of Dec 31, 2018.
Full-Year Highlights
Adjusted net income of $1.19 per share beat the Zacks Consensus Estimate by 6.3%. The bottom line improved 40% year over year.
Operating revenues of $1.3 billion increased 10.4% year over year.
FGL Holdings achieved $185 million in deposits in 2018.
Financial Update
Cash and cash equivalents were $571 million, down 53% year over year. Investments totaled $23.9 billion, up 1.3%.
Debt fell 17.9% year over year to $64 million as of Dec 31, 2018.
Shareholders’ equity of $890 million at the quarter-end decreased 54.7%.
Book value per share, excluding accumulated other comprehensive income, was $6.43 as of Dec 31, 2018, down 8.8% year over year.
Risk-based capital ratio was 470%.
Share Repurchase and Dividend Update
The company bought back $4 million worth shares in in the fourth quarter, and had $146 million remaining under its authorization.
The board of directors declared a quarterly dividend of 1 cent per share, payable Apr 1, to shareholders of record as on Mar 18, 2019.
Zacks Rank
FGL Holdings currently 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 in the life insurance industry that have already reported fourth-quarter earnings, Lincoln National Corporation LNC and Reinsurance Group of America, Incorporated. RGA surpassed the respective Zacks Consensus Estimate for earnings while Genworth Financial Inc. GNW missed the same.
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