Globe Life Inc.’s GL fourth-quarter 2023 net operating income of $2.80 per share beat the Zacks Consensus Estimate by 2.2%. The bottom line improved 10% year over year, primarily driven by higher excess investment income and insurance underwriting income.
The company reported operating revenues of $1.4 billion, up 4.2% from the year-ago quarter. The improvement was driven by growth in Life and Health insurance premiums and higher net investment income. The top line beat the Zacks Consensus Estimate by 0.2%.
The strong quarterly results of Globe Life were supported by improving insurance underwriting income, higher net investment income and premiums in the Life and Health segments. Higher expenses partially offset the upside.
Globe Life Inc. Price, Consensus and EPS Surprise
Globe Life Inc. Price, Consensus and EPS Surprise
Globe Life Inc. price-consensus-eps-surprise-chart | Globe Life Inc. Quote
Behind the Headlines
Globe Life reported total premium revenues of $1.13 billion, up 4% year over year. This upside was primarily driven by higher premiums from Life and Health insurance.
Net investment income increased 6% year over year to $271.6 million. Excess investment income, a measure of profitability, increased 17% year over year to $35.8 million.
Total insurance underwriting income increased 4% year over year to $327.8 million. The increase was due to improved Life underwriting income.
Administrative expenses were down 1% year over year to $77.2 million.
Total benefits and expenses increased 3.9% year over year to $1.01 billion, primarily due to higher total policyholder benefits, amortization of deferred acquisition costs, commissions, premium taxes, and non-deferred acquisition costs and interest expenses.
Segmental Results
Premium revenues at Life increased 4% year over year to $794.8 million, driven by higher premiums written by distribution channels like American Income and Liberty National Division. American Income grew 7% and Liberty National gained 8%.
Net sales of $130.4 million increased 3% year over year. Underwriting margins improved 4.3% year over year to $305.5 million.
Health insurance premium revenues rose 3% year over year to $335.8 million, primarily driven by higher premiums from Family Heritage, Liberty National and American Income. Net health sales increased 21% year over year to $69.2 million. Underwriting margins rose 1.3% year over year to $97.5 million.
Financial Update
Shareholders’ equity, excluding accumulated other comprehensive income (AOCI), as of Dec 31, 2023, increased 7.7% year over year to $7.25 billion. As of Dec 31, 2023, Globe Life reported book value per share, excluding AOCI, of $76.21, up 11.5% year over year.
Operating return on equity, excluding AOCI, was 14.7% in the reported quarter, which contracted 10 basis points year over year.
Share Repurchase
Globe Life repurchased 0.66 million shares worth $77 million in the reported quarter.
Full-Year Highlights
Full-year 2023 net operating income of $10.65 increased 10% year over year. Total revenues rose 3.9% from the year-ago quarter to $5.5 billion.
2024 View
GL estimates net operating income in the range of $11.30-$11.80 per diluted common share for the year ending Dec 31, 2024.
Zacks Rank
Globe Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Synchrony Financial SYF reported fourth-quarter 2023 adjusted earnings per share of $1.03, which beat the Zacks Consensus Estimate by 7.3%. However, the bottom line declined 18.3% year over year. Net interest income improved 8% year over year to $4.46 billion, beating the consensus mark by 0.3%. Other income of Synchrony amounted to $71 million, which surged 136.7% year over year in the fourth quarter and beat our estimate by more than one-fold due to higher interchange revenues and protection product revenues.
Total deposits were $81.2 billion, which rose 13.1% year over year. Provision for credit losses increased 50.2% year over year to $1.80 billion due to increased net charge-offs. The purchase volume of Synchrony advanced 3% year over year to $49.3 billion in the fourth quarter. However, the figure lagged our estimate by 3.9%. Interest and fees on loans of $5.32 billion improved 16.3% year over year, which outpaced our estimate by 1.1%.
Euronet Worldwide, Inc. EEFT reported fourth-quarter 2023 adjusted earnings of $1.88 per share, which beat the Zacks Consensus Estimate by 7.4%. The bottom line climbed 35% year over year. Total revenues advanced 11% year over year, or 7% on a constant-currency basis, to $957.7 million in the quarter under review. The top line outpaced the consensus mark by 2.2%.
EEFT’s net income was $1.43 per share, which improved 9.2% year over year in the fourth quarter. Operating income of $97.4 million rose 23% year over year, or 22% on a constant-currency basis. Total operating expenses increased 9.5% year over year to $3.3 billion in the quarter under review due to higher direct operating costs, salaries and benefits and selling, general and administrative expenses. Adjusted EBITDA advanced 16% year over year, or 14% on a constant-currency basis, to $147.6 million.
RenaissanceRe Holdings Ltd. RNR reported fourth-quarter 2023 operating income of $11.77 per share, which beat the Zacks Consensus Estimate by 44.8%. The bottom line increased 60.6% year over year. Total operating revenues increased 42.5% year over year to $2.6 billion in the fourth quarter. The top line outpaced the consensus mark by 19.6%. Gross premiums written of $1.8 billion increased 13.7% year over year in the fourth quarter. The metric outpaced our estimate by 12.5%.
Net premiums earned improved 38.5% year over year to $2.2 billion. The figure surpassed our estimate by 35.2%. The net investment income of RenaissanceRe amounted to $377 million, which increased 11.6% year over year in the quarter under review. RNR reported an underwriting income of $541 million, which surged 71% year over year. The combined ratio improved 450 basis points year over year to 76% in the fourth quarter.
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