Core Insights - Financial wellness support is becoming a crucial factor for companies in attracting and retaining top talent amid rising debt and cost-of-living challenges [1] Group 1: Research Findings - Lincoln Financial's Wellness@Work research study includes insights from over 2,500 full-time workers across various industries and generations [1] - The study explores perceptions related to retirement readiness and employee benefits [1]

Core Insights - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for momentum stocks is challenging, as they can lose momentum if their valuations exceed future growth potential [1] Group 1: Momentum Investing Strategy - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [2] - Lincoln National (LNC) is highlighted as a strong candidate for momentum investing, showing a four-week price change of 3.9% [3] - LNC has demonstrated significant long-term momentum, gaining 27.7% over the past 12 weeks, with a beta of 1.48 indicating higher volatility compared to the market [4] Group 2: Valuation and Earnings Estimates - LNC has a Momentum Score of A, suggesting it is an opportune time to invest in the stock for potential gains [5] - The stock has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - LNC is trading at a Price-to-Sales ratio of 0.45, indicating it is undervalued, as investors pay only 45 cents for each dollar of sales [6] Group 3: Additional Opportunities - Besides LNC, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [8]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential [1] - The popularity of insurance companies in the Philippines has influenced investment strategies, leading to diversification beyond traditional savings [1] - The trend of investing in blue-chip companies has evolved, with a broader portfolio now including various industries and market capitalizations [1] Investment Focus - The current investment focus includes banks, telecommunications, logistics, and hotels, indicating a diversified approach to portfolio management [1] - The entry into the US market has expanded investment opportunities, particularly in sectors like banking, hotels, shipping, and logistics [1] Market Engagement - The use of platforms like Seeking Alpha has enhanced market analysis and comparison between different regions, particularly between the US and Philippine markets [1] - The experience of acting as a personal broker has provided deeper insights into the US market dynamics, facilitating informed investment decisions [1]

Core Insights - Lincoln Financial has launched a new private market fund called the Lincoln Bain Capital Total Credit Fund in partnership with Bain Capital [1] - The fund is designed to provide a globally diversified portfolio of private credit investments, targeting loans to mid-sized private companies and asset-based financing [1] Company Overview - Lincoln Financial is a prominent provider of insurance, annuities, group benefits, and retirement solutions [1] - The collaboration with Bain Capital highlights Lincoln Financial's strategy to expand its investment offerings in the private credit market [1] Fund Details - The Lincoln Bain Capital Total Credit Fund is characterized as an evergreen fund, indicating it will have a continuous investment strategy [1] - The fund aims to cater to a diverse range of private credit investments, enhancing Lincoln Financial's portfolio [1]

Core Insights - Lincoln National Corporation (LNC) reported second-quarter adjusted earnings per share of $2.36, exceeding the Zacks Consensus Estimate by 23.6% and reflecting a year-over-year increase of 28.3% [1][8] - Adjusted operating revenues rose 4.4% year over year to $4.7 billion, surpassing the consensus mark by 1.2% [1][8] Financial Performance - The strong quarterly results were driven by higher insurance premiums, strong annuity deposits, and solid Group Protection performance [2] - Insurance premiums increased by 3.5% year over year to $1.7 billion, slightly above the Zacks Consensus Estimate [3] - Net investment income grew by 10.1% year over year to $1.5 billion, beating the consensus estimate of $1.4 billion [3][8] - Total expenses decreased by 21.2% year over year to $3.2 billion [4][8] - Lincoln National generated a net income of $699 million, down from $895 million in the prior-year quarter [4] Segment Performance - The Annuities segment's operating income was $287 million, a 3% decline year over year, but above the consensus estimate [6] - The Life Insurance unit reported an operating income of $32 million, improving from a loss of $35 million in the prior year [7] - The Group Protection segment's operating income increased by 33.1% year over year to $173 million, exceeding the Zacks Consensus Estimate [8] - The Retirement Plan Services segment recorded an operating income of $37 million, down 8% year over year [10] Financial Position - As of June 30, 2025, Lincoln National had cash and invested cash of $7.1 billion, up from $5.8 billion at the end of 2024 [12] - Total assets increased to $399.1 billion from $390.8 billion at the end of 2024 [12] - Long-term debt decreased to $5.8 billion from $7.1 billion as of December 31, 2024 [12] - Total stockholders' equity rose to $9.5 billion from $8.3 billion at the end of 2024 [12] Outlook - The Group Protection unit is expected to experience a seasonally higher loss ratio in the fourth quarter of 2025 [15] - The Life Insurance segment is forecasted to see favorable mortality results in the third and fourth quarters of 2025 [15] - In 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 [16]

Core Viewpoint - Lincoln National Corporation (NYSE: LNC) has shown moderate performance over the past year, with a 7% increase in share price and a nearly 5% dividend yield, following a period of significant underperformance [1] Company Performance - The company has taken meaningful actions to improve its performance after several years of underperformance [1] Investment Strategy - The article emphasizes a contrarian investment approach based on macro views and stock-specific turnaround stories to achieve outsized returns with a favorable risk/reward profile [1]

Core Insights - Lincoln National reported non-GAAP earnings per share of $2.36 for Q2 2025, exceeding analyst expectations by 25.5% [1] - Non-GAAP revenue was $4.308 billion, falling short of the consensus estimate of $4.66 billion by 7.6% [1] - The company showed improved operating margins, particularly in the Group Protection segment, which reached an operating margin of 12.5% [1] Financial Performance - Non-GAAP EPS increased by 26.2% year-over-year from $1.87 in Q2 2024 [2] - GAAP revenue decreased by 21.5% from $5.15 billion in Q2 2024 to $4.04 billion in Q2 2025 [2] - GAAP net income per diluted share fell by 25.6% from $5.11 in Q2 2024 to $3.80 in Q2 2025 [2] - Adjusted operating income (non-GAAP) rose to $427 million, a 31.8% increase from $324 million in the prior year [2] Business Segments Overview - Lincoln National operates through four segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services [3] - The Annuities segment reported operating income of $287 million, a 3% decline year-over-year, with sales growing 5% to $4.0 billion [6] - Life Insurance segment reversed a prior year loss, reporting operating income of $32 million, with sales increasing 15% to $121 million [7] - Group Protection achieved record operating income of $173 million, a 33% increase year-over-year, with premiums rising to $1.4 billion [8] - Retirement Plan Services saw operating income fall by 8% to $37 million, despite a 9.5% increase in deposits to $3.6 billion [9] Strategic Initiatives - The company is focusing on diversifying earnings sources, controlling expenses, and improving capital flexibility [4] - Distribution efficiency and product innovation are key priorities, with recent partnerships aimed at boosting sales and innovation [10] - A partnership with Bain Capital was established to manage at least $20 billion in assets over six years, enhancing investment capabilities [12] Risk Management and Financial Strength - Lincoln National maintained a risk-based capital (RBC) ratio above 420%, exceeding its 400% target [11] - Holding company liquidity was steady at $466 million as of Q2 2025, with net unrealized losses in available-for-sale securities narrowing by $1.4 billion year-over-year [12] - No material changes were reported in the company's financial strength ratings, with stable outlooks from major rating agencies [13] Future Outlook - Management did not provide formal financial guidance for the upcoming quarters but emphasized a disciplined approach to capital and risk-adjusted returns [14] - Investors are advised to monitor future net flow metrics in Annuities and Retirement Plan Services, as sustained outflows could impact profitability [15]

Financial Performance - As of June 30, 2025, Lincoln National Corporation reported consolidated net income of $X million, reflecting a Y% increase compared to the same period in 2024[242]. - As of June 30, 2025, the company reported a net income of $699 million, a decrease from $895 million in the same period of 2024[294]. - For the three months ended June 30, 2025, annuity income was $287 million, down from $297 million in 2024, while life insurance income improved to $32 million from a loss of $35 million[294]. - For the three months ended June 30, 2025, total operating revenues increased to $1,602 million, up from $1,511 million in 2024, representing a growth of 6.0%[313]. - Net investment income for the six months ended June 30, 2025, was $1,172 million, compared to $1,114 million in 2024, reflecting a 5.2% increase driven by higher investment income on alternative investments[325]. - The company experienced a gain on extinguishment of debt amounting to $94 million for the three and six months ended June 30, 2025[295]. - Total operating revenues for the Annuities segment were $1.214 billion for the three months ended June 30, 2025, compared to $1.209 billion in 2024[298]. - Total operating expenses for the six months ended June 30, 2025, were $3,186 million, slightly up from $3,153 million in 2024, indicating a 1.0% increase[313]. Capital Management - The company sold approximately 18.8 million shares of its common stock for aggregate consideration of $825 million, representing 9.9% of its outstanding common stock[258]. - The company anticipates deploying capital from the stock sale towards strategic priorities, including growing spread-based earnings and optimizing its legacy life portfolio[258]. - LNC made capital contributions in cash to subsidiaries totaling $805 million for the six months ended June 30, 2025, including $800 million to LNL from the Bain Capital transaction[417]. - LNC's total long-term debt was $5.767 billion as of June 30, 2025, after accounting for repayments and changes in fair value[421]. - LNC issued $500 million of 2.330% Senior Notes due 2030, with a fair value of $418 million for the Trust I Eligible Assets received[430]. Investment Portfolio - Investments on the Consolidated Balance Sheets carried at fair value totaled $100,389 million, with 92% priced using observable inputs[262]. - The fair value of investments includes $592 million priced by third-party pricing services and $75,749 million using significant observable inputs[262]. - The total investments as of June 30, 2025, amounted to $131.144 billion, compared to $129.254 billion as of December 31, 2024, showing a 1.5% increase[364]. - Fixed maturity AFS securities were valued at $89.386 billion as of June 30, 2025, representing 68.1% of total investments[364]. - The total unrealized losses for fixed maturity AFS securities were $9,979 million, indicating significant market fluctuations[369]. Risk Management - The company emphasizes the importance of risk management policies and the potential impact of economic conditions on its financial performance[253]. - The MD&A highlights the need for careful consideration of forward-looking statements due to inherent risks and uncertainties[246]. - A hypothetical 10% decrease in equity market return could result in a $800 million decrease in net income, while a 10% increase could lead to a $725 million increase[281]. - The company utilizes derivative instruments to hedge exposure to selected risks associated with GLB and GDB riders, focusing on maximizing distributable earnings and protecting capital[276]. Segment Performance - The company operates through four business segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services[254]. - The Group Protection segment showed an improvement in the total loss ratio, contributing positively to overall performance[296]. - Income from operations for the Group Protection segment increased to $173 million for the three months ended June 30, 2025, compared to $130 million in 2024, marking a growth of 33.1%[331]. - The total operating revenues for the Group Protection segment reached $1,538 million for the three months ended June 30, 2025, up from $1,441 million in 2024, indicating a growth of 6.7%[331]. Policyholder and Claims Management - Future contract benefits represent liability reserves based on estimates for future claims and benefits[267]. - Liability for Future Policy Benefits (LFPB) is established based on actuarial assumptions including mortality rates and policyholder behavior, with a comprehensive review conducted quarterly[268]. - As of June 30, 2025, the total Net Amount at Risk (NAR) for Guaranteed Living Benefits (GLB) and Guaranteed Death Benefits (GDB) was $1,889 million, down from $2,278 million in 2024[275]. - The loss ratio for the total segment improved to 65.9% for the three months ended June 30, 2025, down from 70.1% in 2024, showing a positive trend in claims management[337]. Cash Flow and Liquidity - The company’s operating activities provided cash of $741 million for the six months ended June 30, 2025, compared to a cash usage of $(2.2) billion in 2024[408]. - The company’s liquidity is primarily sourced from insurance premiums and fees, investment income, and policyholder deposits, with ongoing cash needs expected to be met[404][408]. - Total cash dividends and return of capital from subsidiaries amounted to $170 million for the three months ended June 30, 2025, compared to $15 million for the same period in 2024[410]. Expenses and Cost Management - Total operating expenses for the Annuities segment were $876 million for the three months ended June 30, 2025, compared to $858 million in 2024[298]. - Commissions and other expenses totaled $405 million in Q2 2025, down from $441 million in Q2 2024, with total pre-broker-dealer expenses incurred at $290 million compared to $284 million in the prior year[311]. - General and administrative expenses for the three months ended June 30, 2025, were $57 million, down from $64 million in 2024, a decrease of 10.9%[360]. Market and Economic Conditions - The company may update actuarial assumptions in any quarter as new information becomes available, ensuring the accuracy of liability estimations[270]. - The company anticipates managing the effects of interest rate spreads through portfolio management, with potential impacts on profitability due to changes in interest rates[304].

Core Insights - Lincoln National (LNC) reported $4.73 billion in revenue for Q2 2025, a year-over-year increase of 4.4% and an EPS of $2.36 compared to $1.84 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - Revenue of $4.73 billion surpassed the Zacks Consensus Estimate of $4.67 billion, resulting in a surprise of +1.23% [1] - EPS of $2.36 exceeded the consensus estimate of $1.91, delivering a surprise of +23.56% [1] Key Metrics - Net Flows - Life Insurance: $633 million, exceeding the estimate of $622.2 million [4] - Net Flows - Retirement Plan Services: $-585 million, worse than the estimate of $-140.99 million [4] - Loss Ratio - Group Protection: 65.9%, better than the estimate of 70.5% [4] - Net Flows - Annuities: $-1.16 billion, matching the average estimate [4] - Fee Income: $1.34 billion, slightly below the estimate of $1.35 billion, with a year-over-year change of +0.1% [4] - Insurance Premiums: $1.68 billion, in line with the estimate, reflecting a year-over-year change of +3.5% [4] - Net Investment Income: $1.47 billion, exceeding the estimate of $1.39 billion, with a year-over-year change of +10.1% [4] - Life Insurance Revenue: $1.6 billion, surpassing the estimate of $1.58 billion, with a year-over-year change of +6% [4] - Group Protection Revenue: $1.54 billion, exceeding the estimate of $1.52 billion, with a year-over-year change of +6.7% [4] - Other Operations Revenue: $41 million, below the estimate of $53.37 million, with a year-over-year change of +5.1% [4] - Retirement Plan Services Revenue: $331 million, slightly above the estimate of $327.13 million, with a year-over-year change of +1.2% [4] - Annuities Revenue: $1.21 billion, below the estimate of $1.23 billion, with a year-over-year change of +0.4% [4] Stock Performance - Lincoln National shares have returned -2.2% over the past month, while the Zacks S&P 500 composite has changed by +2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Adjusted operating income increased by 32% year over year, reaching $427 million or $2.36 per diluted share [4][27] - Net income available to common stockholders was $688 million or $3.80 per diluted share, reflecting positive market risk benefits [27] - The estimated RBC ratio remained above 420%, consistent with the company's strategy to maintain a capital buffer above the 400% target [43] 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% [28][18] - Annuities generated operating income of $287 million, slightly down from $297 million in the prior year, primarily due to traditional variable annuity outflows [35] - Life Insurance reported operating earnings of $32 million, a significant improvement from an operating loss of $35 million in the prior year [40] 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 [8] - Retirement Plan Services saw first-year sales increase by nearly 50% year over year, with total deposits up by 10% [22] Company Strategy and Development Direction - The company is focused on increasing risk-adjusted returns, reducing volatility, and growing its franchise through a disciplined growth strategy [5][24] - Strategic investments are being made in higher-margin products and segments, enhancing digital capabilities, and optimizing the operating model [7][8] - The company aims to deepen its strategic moat and evolve into a more agile, scalable organization [24] 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 [25][48] - The economic backdrop remains volatile, but the company is committed to delivering long-term value and sustainable growth [8][24] Other Important Information - The company has launched a Bermuda-based reinsurance subsidiary to enhance its investment strategy [7] - The alternative investment portfolio achieved a 10% annualized return, contributing positively to overall earnings [27][47] Q&A Session Summary Question: On group and the shift into smaller local markets and supplemental health products - Management highlighted the successful execution of a targeted segment strategy, particularly in local markets and supplemental health, which are expected to drive margin expansion [50][51] Question: On the restructuring of the Life Captives - Management indicated that specifics on the impact of restructuring on earnings and free cash flow would be provided once more concrete details are available, with potential impacts expected in the following year [62][64] Question: On RILA product sales and market competition - Management reported a 32% increase in RILA sales year over year, attributing growth to the introduction of a second-generation product and expanding distribution segments [67][69] Question: On free cash flow conversion guidance - Management expressed confidence in the long-term free cash flow conversion rate being above previous targets, especially with the deployment of Bain Capital [74][76] Question: On distribution strategies in the group business - Management emphasized 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 is exploring options for external reinsurance focused on the legacy life block, with the potential for less reliance on structured deals due to deployable excess capital [88]