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]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2025 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________ to _________. Commission File Number: 1-6028 ______________________________________________________________________________________________________ ...

Core Viewpoint - Lincoln National (LNC) reported a revenue of $4.69 billion for Q1 2025, marking a year-over-year increase of 2.2% and an EPS of $1.60, up from $1.37 a year ago, although slightly below the consensus revenue estimate of $4.71 billion, resulting in a surprise of -0.52% [1] Financial Performance Metrics - Loss Ratio for Group Protection was reported at 72.4%, better than the estimated 74.4% [4] - Net Flows for Annuities were -$1.68 billion, worse than the estimated -$1.54 billion [4] - Net Flows for Life Insurance were $569 million, below the estimated $643.81 million [4] - Net Flows for Retirement Plan Services were -$2.18 billion, significantly worse than the estimated -$493.84 million [4] - Net investment income revenue was $1.46 billion, exceeding the estimate of $1.39 billion, with a year-over-year increase of 8.3% [4] - Fee income revenue was $1.37 billion, matching the average estimate, with a year-over-year change of 3.1% [4] - Insurance premiums revenue was $1.68 billion, slightly above the estimated $1.65 billion, reflecting a year-over-year increase of 4.7% [4] - Life Insurance net investment income was $571 million, slightly below the estimate of $577.29 million, showing a year-over-year decrease of 1.7% [4] - Group Protection revenue was $1.52 billion, exceeding the estimate of $1.47 billion, with a year-over-year increase of 6.7% [4] - Life Insurance revenue was $1.59 billion, slightly below the estimated $1.60 billion, representing a year-over-year increase of 3% [4] - Retirement Plan Services revenue was $327 million, below the estimated $334.72 million, with a year-over-year increase of 1.6% [4] - Annuities insurance premiums revenue was $21 million, significantly below the estimated $33.76 million, reflecting a year-over-year decrease of 19.2% [4] Stock Performance - Lincoln National's shares returned +3% over the past month, compared to the Zacks S&P 500 composite's +11.3% change, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [3]

Lincoln National Corporation (LNC) Q1 2025 Earnings Call May 08, 2025 08:00 AM ET Company Participants Tina Madon - Senior VP & Head of Investor RelationsEllen Cooper - Chairman, President & CEOChristopher Neczypor - Executive VP & CFORyan Krueger - Managing Director Conference Call Participants Suneet Kamath - Senior Research AnalystWes Carmichael - Senior AnalystThomas Gallagher - AnalystJoel Hurwitz - Lead AnalystAlex Scott - Equity Research Analyst Operator Good morning, and thank you for joining Lincol ...

Financial Data and Key Metrics Changes - Adjusted operating income increased by 14% year over year, demonstrating continued execution of strategic initiatives [6][10] - First quarter adjusted operating income available to common stockholders was $280 million, or $1.60 per diluted share [24] - Net loss available to common shareholders was $756 million, or $4.41 per diluted share, primarily due to negative movements in market risk benefits [25][26] Business Line Data and Key Metrics Changes - Group Protection business saw a 26% year-over-year increase in earnings and 120 basis points of margin expansion [10][16] - Annuities reported first quarter operating income of $290 million, consistent with the prior year quarter [30] - Life insurance segment reported a first quarter operating loss of $16 million, an improvement from a loss of $35 million in the prior year [34] Market Data and Key Metrics Changes - Total deposits in Retirement Plan Services grew by 8%, driven by a 13% increase in recurring deposits [33] - Group sales grew by 9% year over year, with all market segments contributing to this result [17] - Annuities total sales reached $3.8 billion, a 33% increase from the prior year quarter [11] Company Strategy and Development Direction - The company is focusing on diversifying its business mix and enhancing operational efficiency to manage market volatility [5][10] - A long-term partnership with Bain Capital is expected to enhance growth in spread-based products and improve capital deployment [9][40] - The strategic emphasis on growing group business has increased its contribution to operating earnings from less than 10% pre-COVID to over 25% today [46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged high market volatility and an uncertain external backdrop but expressed confidence in the company's resilience and strategic positioning [4][10] - The company is well-prepared to navigate potential economic downturns due to proactive capital management and diversified earnings sources [38][46] - Management remains focused on disciplined execution and believes current actions will lead to sustainable long-term value [47] Other Important Information - The company maintains an estimated RBC ratio well above 420%, providing a buffer against adverse economic conditions [7][38] - The alternative investments portfolio delivered a 7.6% annualized return in the quarter, though it was below the target [25][39] Q&A Session Summary Question: Insights on the Bain partnership and expected free cash flow improvements - Management indicated that the capital from Bain will be deployed to grow spread-based earnings and optimize the legacy LifeBlock, with no immediate plans for share repurchases [49] Question: Favorability of mortality in the life business - Management noted that mortality was better than expected, with first quarter typically being seasonally higher [50][51] Question: Rationale for issuing new equity to Bain instead of open market purchases - Management emphasized the importance of alignment with Bain and the ability to utilize capital for growth, which would not be feasible through open market purchases [56][59] Question: Annuity business ROA trends - Management acknowledged that the decline in ROA is due to a shift in business mix, with a focus on growing RILA and fixed annuities [64] Question: RBC ratio sensitivity to macro volatility - Management clarified that the RBC ratio remains stable and is not materially affected by recent market conditions [69] Question: Impact of large plan termination on Retirement Plan Services - Management confirmed that a large case termination affected net outflows but overall flows were positive excluding this event [80]

Lincoln National (LNC) came out with quarterly earnings of $1.60 per share, beating the Zacks Consensus Estimate of $1.54 per share. This compares to earnings of $1.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.90%. A quarter ago, it was expected that this insurance and retirement business would post earnings of $1.74 per share when it actually produced earnings of $1.91, delivering a surprise of 9.77%.Over the last fou ...

Earnings Supplement First Quarter 2025 May 8, 2025 Forward-Looking Statements – Cautionary Language Certain statements made in this press release and in other written or oral statements made by Lincoln or on Lincoln's behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply f ...

Financial Performance - Total revenues for Q1 2025 were $4,691 million, an increase of 14.0% compared to Q4 2024[20] - Net loss available to common stockholders for Q1 2025 was $(756) million, a decrease from net income of $1,675 million in Q4 2024[20] - Net income for the three months ended 3/31/24 was $1,222 million, while for 3/31/25 it was a loss of $722 million, indicating a significant fluctuation[26] - Total adjusted operating revenues for Lincoln Financial increased by 2.2% to $4,685 million for the three months ended March 31, 2025, compared to $4,584 million in the same period of 2024[31] - Net income available to common stockholders for the three months ended March 31, 2024, was $1,191 million, a significant increase compared to the previous quarter's $884 million[47] Revenue Sources - Insurance premiums increased by 4.7% to $1,676 million in Q1 2025 from $1,586 million in Q4 2024[20] - Net investment income rose by 8.2% to $1,457 million in Q1 2025, up from $1,435 million in Q4 2024[20] - Total annuities sales increased by 33.1% to $3,789 million in Q1 2025, driven by strong RILA and traditional variable products[30] - Life insurance operating revenues increased by 3.0% to $1,541 million in Q1 2024, with average in-force face amount slightly declining by 1.2%[28] - Group protection operating revenues rose by 6.7% to $1,425 million in Q1 2024, with insurance premiums also increasing by 6.7%[28] Expenses and Losses - Total expenses surged by 117.9% to $5,640 million in Q1 2025, compared to $2,963 million in Q4 2024[20] - Adjusted income from operations available to common stockholders for 3/31/25 was $280 million, reflecting a 33.3% decrease from the previous quarter[26] - Pre-tax adjusted income from operations for 3/31/25 was $362 million, a 24.4% decrease from the previous quarter[26] - Total operating commissions and other expenses incurred decreased by 5.6% to $1,405 million for the three months ended March 31, 2025, down from $1,488 million in the same period of 2024[32] Assets and Liabilities - Total assets as of 3/31/25 decreased by 0.1% to $382,898 million compared to 12/31/24[21] - Total liabilities as of 3/31/25 decreased by 0.3% to $374,705 million compared to 12/31/24[23] - Total stockholders' equity as of 3/31/25 was $8,193 million, an 8.6% decrease from the previous quarter[24] - The average account balances, net of reinsurance, for Lincoln Financial increased by 5.0% to $44,390 million for the three months ended March 31, 2025, compared to $42,280 million for the same period in 2024[34] Market and Investment Outlook - Future outlook includes continued focus on annuities and retirement plan services, with deposits from new and existing customers expected to drive growth[17] - The company reported a leverage ratio to monitor debt relative to total capitalization, indicating financial health and risk management[14] - Credit ratings as of May 8, 2025, include a senior debt rating of bbb+ from AM Best and BBB+ from Fitch[18] - Investment gains (losses) decreased by 27.2% in Q1 2025 compared to the previous year, indicating a challenging investment environment[48] Shareholder Information - Cash returned to common stockholders through common dividends remained stable at $77 million for the next four quarters, reflecting a 1.3% increase[27] - Book value per share as of 3/31/25 was $41.96, a 9.1% increase from 12/31/24[26] - Stockholders' equity at the end of Q1 2025 was $8,193 million, showing an 8.6% increase year-over-year[50] - Adjusted stockholders' equity reached $12,569 million by Q1 2025, marking a 13.4% increase from the previous year[50] Operational Highlights - The effective federal income tax rate for the three months ended March 31, 2025, was 14.7%, down from 18.5% in the same period of 2024[33] - The loss ratio for Lincoln Financial's Life product line improved to 75.2% for the three months ended March 31, 2025, compared to 76.1% for the same period in 2024[36] - The balance of DAC, VOBA, and DSI at the end of the period increased by 1.3% from $12,475 million on 12/31/24 to $12,563 million on 3/31/25[39] - The company reported a significant increase in revenue adjustments from annuity and life insurance product features, with a change of 139.1% in Q1 2025[48]

Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short- term price performance of a stock. While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrut ...