Unum Group (UNM) is set to report fourth-quarter and full-year 2014 results on Feb 3 after the market closes. Last quarter, the company posted a -3.33% earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing This Past Quarter
A solid sales momentum, higher premium growth and favorable risk results are likely to continue driving results. Also, a lower share count owing to continued share repurchases will add to the bottom line.
Management expects operating earnings per share to improve by 5–10% in 2014. It also estimates capital metrics to remain solid at the year end.
Yet performance at long-term care business will remain soft due to a still soft low interest rate environment.
Earnings Whispers
Our proven model does not conclusively show that Unum Group is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Unum Group has +1.14% earnings ESP. This is because the Most Accurate estimate stands at 89 cents while the Zacks Consensus Estimate stands at 88 cents.
Zacks Rank: Unum Group has a Zacks Rank #4 (Sell) which decreases the predictive power of ESP. We caution investors against Sell-rated (Rank #4 or 5) stocks going into the earnings announcement.
Stocks to Consider
Here are some companies you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
The Allstate Corporation (ALL), Earnings ESP of +1.21% and a Zacks Rank #1 (Strong Buy).
HCC Insurance Holdings Inc. (HCC), Earnings ESP of +2.08% and a Zacks Rank #2 (Buy).
The Hartford Financial Services Group, Inc. (HIG), Earnings ESP of +1.08% and a Zacks Rank 2.
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