Financial Data and Key Metrics Changes - Adjusted operating income increased by 32% year over year, reaching $427 million or $2.36 per diluted share [25][4] - Net income available to common stockholders was $688 million or $3.80 per diluted share, reflecting positive market risk benefits [25][26] - The estimated RBC ratio remained above 420%, consistent with the company's strategy to maintain a capital buffer above the 400% target [40][22] Business Line Data and Key Metrics Changes - Group Protection business achieved record earnings of $173 million, up 33% year over year, with a margin increase to 12.5% [26][17] - Annuities generated operating income of $287 million, slightly down from $297 million in the prior year, primarily due to traditional variable annuity outflows [32] - Life Insurance reported operating earnings of $32 million, a significant improvement from an operating loss of $35 million in the prior year [37] Market Data and Key Metrics Changes - All four business segments delivered double-digit sales growth in the first half of the year, with notable contributions from previously non-key products [7] - Retirement Plan Services saw first-year sales increase by nearly 50% year over year, with total deposits up by 10% [20] - Annuities sales reached $4 billion, a 6% sequential increase, with fixed annuity sales growing by 41% [9][11] Company Strategy and Development Direction - The company is focused on increasing risk-adjusted returns, reducing volatility, and growing its franchise through disciplined execution [5][6] - Strategic investments are being made in higher-margin products and segments, enhancing digital capabilities, and optimizing the operating model [6][22] - The company aims to deepen its strategic moat and evolve into a more agile organization, aligning capital deployment with strategic priorities [22][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, emphasizing the importance of disciplined execution and strategic clarity [46][23] - The economic backdrop remains volatile, but the company is committed to delivering long-term value and sustainable growth [7][22] - Management noted that while results may not be linear, the momentum is building, and they are excited about the path forward [7][8] Other Important Information - The company launched a Bermuda-based reinsurance subsidiary to enhance capital efficiency and respond to market opportunities [6] - The alternative investment portfolio achieved a 10% annualized return, supporting the overall financial performance [25][45] - The company is actively exploring external reinsurance solutions to optimize its legacy life portfolio [88] Q&A Session Summary Question: On group and the shift into smaller local markets and supplemental health products - Management highlighted the successful execution of targeted segment strategies, particularly in local markets and supplemental health, which are expected to continue driving margin expansion [50][51] Question: On the restructuring of the Life Captives - Management indicated that while they are working on optimizing the life portfolio, concrete numbers regarding earnings impact will be provided later [61][62] Question: On RILA product sales and market competition - Management reported a 32% increase in RILA sales year over year, emphasizing a focus on profitable growth and capital efficiency [66][68] Question: On free cash flow conversion guidance for 2026 - Management expressed confidence that the long-term free cash flow conversion rate should be above previous targets, especially with the deployment of Bain Capital [74][76] Question: On distribution growth drivers in the group business - Management discussed the importance of strategic broker relationships and investments in digital capabilities to enhance competitive differentiation and drive growth [80][82] Question: On external reinsurance solutions - Management noted that while it is too early to discuss specifics, they are focused on optimizing the legacy life block through potential reinsurance deals [88]

Core Viewpoint - Lincoln National (LNC) reported quarterly earnings of $2.36 per share, exceeding the Zacks Consensus Estimate of $1.91 per share, and showing an increase from $1.84 per share a year ago, resulting in an earnings surprise of +23.56% [1][2] Financial Performance - The company achieved revenues of $4.73 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.23%, compared to $4.53 billion in the same quarter last year [2] - Over the last four quarters, Lincoln National has exceeded consensus EPS estimates four times, but has only topped consensus revenue estimates once [2] Stock Performance - Since the beginning of the year, Lincoln National shares have increased by approximately 7.9%, while the S&P 500 has gained 8.2% [3] - The current Zacks Rank for Lincoln National is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.75 on revenues of $4.73 billion, and for the current fiscal year, it is $7.02 on revenues of $18.83 billion [7] - The trend of estimate revisions for Lincoln National was mixed prior to the earnings release, which may change following the recent results [6] Industry Context - The Insurance - Life Insurance industry, to which Lincoln National belongs, is currently ranked in the top 10% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Adjusted operating income increased by 32% year-over-year (YoY), marking the fourth consecutive quarter of YoY growth[7, 13] - Adjusted operating income was $427 million, or $2.36 per share[12] - Group Protection achieved record earnings, up 33% YoY, with a record margin of 12.5%, a 250 basis points increase[13] - Life Insurance reported earnings of $32 million, supported by in-line alternative investment income and favorable mortality[7, 13] Sales and Growth - Annuities sales increased by 5% YoY, driven by a diversified product mix[7, 13] - Group Protection sales increased by 16% YoY, fueled by local market and supplemental health sales[13] - Life Insurance sales increased by 15% YoY, driven by momentum in risk-sharing products[13] - Retirement Plan Services experienced strong deposit growth, up 10% YoY[13] Capital and Leverage - Estimated Risk-Based Capital (RBC) ratio is greater than 420%, exceeding the 400% target[7, 13] - Leverage ratio improved by 330 basis points YoY to 25.6%, primarily due to equity growth[7, 13] - The company issued $1 billion in P-Caps, increasing access to on-demand capital and extending duration to 2055[13]

Statistical Supplement Second Quarter 2025 | Notes | 1-3 | | --- | --- | | Credit Ratings | 4 | | Consolidated | | | Consolidated Statements of Income (Loss) | 5 | | Consolidated Balance Sheets | 6-7 | | Earnings, Shares and Return on Equity | 8 | | Key Stakeholder Metrics | 9 | | Select Earnings Drivers By Segment | 10 | | Sales By Segment | 11 | | Operating Revenues and General and Administrative Expenses By Segment and Other Operations | 12 | | Operating Commissions and Other Expenses | 13 | | Select Ear ...

Core Insights - Lincoln National Corporation (LNC) is a diversified life insurance and investment management company, providing a range of wealth accumulation, protection, and retirement products. The company has outperformed the industry average with a year-to-date increase of 9.1% compared to 3.7% [1][2]. Company Overview - LNC is headquartered in Radnor, PA, with a market capitalization of $5.9 billion. The company operates through four business segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services. Its trailing 12-month price-to-book (P/B) ratio is 0.82X, significantly lower than the industry average of 2.02X [2]. Financial Estimates - The Zacks Consensus Estimate for LNC's 2025 earnings is $7.11 per share, reflecting a 0.6% year-over-year increase. Revenue estimates for 2025 are projected at $18.7 billion. LNC has consistently beaten earnings estimates over the past four quarters, with an average surprise of 10.7% [4]. Growth Drivers - LNC's revenue growth is driven by strong performance in its Annuities and Group Protection segments, supported by higher insurance premiums and fee income. The company is enhancing its in-force book and margin expansion initiatives, positioning itself well for future growth [5]. - The Annuities segment saw a 33% year-over-year increase in total sales, reaching $3.8 billion in Q1 2025. The company is shifting towards a more balanced mix of products, focusing on spread-based offerings [6]. - The Group Protection business reported a 26% year-over-year increase in income from operations in Q1 2025, with improved underwriting results and prudent acquisitions contributing to its growth. The segment's operating margin improved by 120 basis points [7]. Strategic Initiatives - LNC has formed a long-term strategic partnership with Bain Capital, aimed at enhancing private asset origination and accelerating value creation across various streams. This partnership is part of LNC's efforts to reshape its life product portfolio and improve its retirement business capabilities [8]. Shareholder Returns - In Q1 2025, LNC allocated $77 million for dividend payouts, maintaining a quarterly dividend of 45 cents per share, resulting in a dividend yield of 5.2%, which exceeds the industry average of 3.2% [9].

Group 1 - The article discusses the availability of a free trial for active investors to join a chat room with sophisticated traders and investors [1] Group 2 - There is a disclosure indicating that the author has no current stock or derivative positions in the mentioned companies but may initiate a short position in LNC.PR.D within the next 72 hours [2] - The article emphasizes that past performance does not guarantee future results and that no specific investment recommendations are provided [3]

Core Insights - The article discusses the potential investment opportunities in LNC, highlighting the author's intention to initiate a long position in the stock within the next 72 hours [2]. Group 1: Company Overview - LNC is positioned as a company of interest for potential investment, with the author expressing a favorable outlook on its stock performance [2]. Group 2: Market Context - The financial sector is experiencing fluctuations, and the author, with over 18 years of experience, provides insights into the current market dynamics that may affect LNC [1].

Core Insights - Lincoln National Corporation (LNC) has launched the LVIP American Funds Vanguard Active Passive Growth Fund, aimed at enhancing its variable annuity offerings [1][8] - The fund combines active management from Capital Group and passive strategies from Vanguard, providing a balanced approach to long-term growth [2][3] - The introduction of this fund is timely, as financial advisors recognize the complementary nature of active and passive strategies, especially during market volatility [4] Company Strategy - The new fund is expected to boost LNC's annuity business by attracting new customers and retaining existing ones, with annuity sales increasing by 33% year over year in Q1 2025 [5] - LNC's variable annuities are designed to support diverse client objectives and safeguard retirement income, offering various investment options [6] Market Performance - LNC shares have increased by 6.3% over the past six months, outperforming the industry average growth of 3.3% [7]

Group 1 - Lincoln National (NYSE: LNC) shares have recovered nearly 20% over the past year after a prolonged period of underperformance [1] - The company reported better than expected Q1 results, contributing to the continued gains in its stock price [1] Group 2 - The analyst has over fifteen years of experience making contrarian bets based on macro views and stock-specific turnaround stories [1]

Core Viewpoint - Lincoln National Corporation (LNC) reported a decline in shares by 1.9% following its first-quarter 2025 results, primarily due to a significant rise in total expenses, although this was partially offset by higher insurance premiums and strong annuity deposits [1] Financial Performance - Adjusted earnings per share were $1.60, exceeding the Zacks Consensus Estimate by 3.9% and reflecting a year-over-year increase of 31.1% [2] - Adjusted operating revenues grew 2.2% year over year to $4.7 billion, but missed the consensus mark by 0.5% [2] - Total expenses more than doubled year over year to $5.7 billion, while net loss amounted to $722 million compared to a net income of $1.2 billion in the prior year [4] Segment Performance - The Annuities segment reported operating income of $290 million, a 12% increase year over year, but fell short of the consensus estimate [6] - The Life Insurance unit incurred an operating loss of $16 million, an improvement from the previous year's loss of $35 million, with operating revenues growing 3% year over year to $1.6 billion [7] - The Group Protection segment's operating income increased by 26.3% year over year to $101 million, supported by favorable long-term disability results [8] - The Retirement Plan Services segment recorded an operating income of $34 million, down 5.6% year over year, with total deposits advancing 8.2% year over year to $4.1 billion [9] Financial Position - As of March 31, 2025, Lincoln National had cash and invested cash of $4.3 billion, a decrease of 26.2% from the end of 2024 [11] - Total assets were $382.9 billion, down 2% from the previous year-end [11] - Book value per share, excluding accumulated other comprehensive income, was $61.63, a decline of 14.5% from the end of 2024 [12] Dividend and Outlook - Lincoln National paid out quarterly dividends of $77 million [13] - The company anticipates a seasonally higher loss ratio in the Group Protection unit for the fourth quarter of 2025, while favorable mortality results are expected in the Life Insurance segment [14] Long-term Projections - By 2026, the Annuities, Life Insurance, Group Protection, and Retirement Plan Services units are projected to account for 55-65%, 10-15%, 20-30%, and 5-15% of total operating income, respectively [15]