Primerica Q3 Earnings Beat on Strong Term Life Insurance Sales

Core Insights - Primerica, Inc. (PRI) reported strong third-quarter earnings driven by robust Term Life and Investment and Savings Product sales, with shares increasing by 3.4% post-earnings announcement [1][2] Financial Performance - Adjusted earnings per share for Q3 2024 were $5.68, exceeding the Zacks Consensus Estimate by 18.8% and reflecting a 32.7% increase year-over-year [2] - Total revenue rose 8% year-over-year to $770.1 million, surpassing the consensus estimate by 4.1% [3] - Net premiums reached $439.8 million, a 4.6% increase from the previous year, beating the consensus by 2.3% [5] - Net investment income increased by 18.4% year-over-year to $41.1 million, exceeding the consensus by 10% [5] - Commissions and fees grew by 19.5% year-over-year to $271.9 million, beating the consensus by 6.2% [5] - Total benefits and expenses rose 5.8% to $519.6 million, influenced by higher claims and operating expenses [6] - Adjusted net operating income increased by 21% year-over-year to $193.2 million [6] Segment Performance - Term Life Insurance segment saw adjusted operating revenues climb 5% year-over-year to $450.3 million, with adjusted operating income before taxes increasing by 26% to $178.4 million, beating the consensus by 24.8% [7] - Investment and Savings Products segment reported a 22% year-over-year increase in adjusted operating revenues to $266.1 million, with adjusted operating income before taxes rising 24% to $79.9 million, exceeding the consensus by 11.9% [8] - Corporate and Other Distributed Products segment had adjusted operating revenues of $53.7 million, a 3% increase year-over-year, but reported an adjusted operating loss of $5.7 million due to various factors [9] Financial Position - As of September 30, 2024, Primerica had cash and cash equivalents of $550.1 million, down from $594.1 million at the end of 2023 [10] - Total assets decreased to $14.8 billion from $15 billion at the end of 2023 [10] - Total shareholders' equity was $1.9 billion, down from $2.1 billion at the end of 2023 [12] Capital Management - In Q3 2024, Primerica repurchased shares worth $129 million and paid dividends totaling $31 million [14] - A dividend of 90 cents per share was approved, to be paid on December 12, 2024 [14] Guidance - Primerica anticipates a 3% growth in full-year life sales for 2024 and expects the benefits and claims ratio for the Term Life insurance segment to be around 58% in Q4 2024 [15] - Investment and Savings Product sales are projected to grow between 22% and 25% in 2024 [16] - The company expects a 9% increase in insurance and other operating expenses in 2024 [17]