Core Insights - Lincoln National Corporation (LNC) reported a 2% increase in shares following the release of its third-quarter 2025 results, driven by strong annuity deposits and solid performance in Group Protection and Life Insurance [1] - The company achieved adjusted earnings per share (EPS) of $2.04, exceeding the Zacks Consensus Estimate by 10.9%, although it represented a 1% decline year over year [2] - Adjusted operating revenues grew 3.8% year over year to $4.8 billion, but fell short of the consensus estimate by 0.5% [2] Financial Performance - LNC's estimated Risk-Based Capital (RBC) ratio increased to over 420% by the end of the third quarter [3] - Insurance premiums rose 1.4% year over year to $1.6 billion, missing the Zacks Consensus Estimate by 2.1% [3] - Fee income reached $1.4 billion, up 2.4% year over year, but also missed the consensus mark by 2.2% [3] - Net investment income increased by 9% year over year to $1.5 billion, surpassing the consensus estimate by 6.2% [3] Revenue and Expense Analysis - Other revenues amounted to $206 million, reflecting a 28.8% year-over-year increase [4] - Total expenses decreased by 16.3% year over year to $4 billion [4] - Interest credited rose 8.4% year over year to $954 million [4] - The company reported a net income of $445 million, a significant recovery from a net loss of $528 million in the prior-year quarter [4] Segment Performance - The Annuities segment's operating income was $310 million, a 3% year-over-year increase, exceeding the consensus estimate [6] - Life Insurance operating income improved to $25 million, up from $22 million year over year, benefiting from stable mortality and higher alternative investment income [7] - Group Protection segment's operating income surged 36.7% year over year to $149 million, supported by favorable life experience [8] - Retirement Plan Services segment recorded an operating income of $46 million, a 5% year-over-year increase, aided by favorable equity markets [10] Financial Position - As of September 30, 2025, Lincoln National had cash and invested cash of $10.7 billion, up from $5.8 billion at the end of 2024 [12] - Total assets increased to $415.3 billion from $390.8 billion at the end of 2024 [12] - Long-term debt decreased to $5.8 billion from $5.9 billion as of December 31, 2024 [12] - Total stockholders' equity rose to $10.5 billion from $8.3 billion at the end of 2024 [12] Dividend and Outlook - Lincoln National paid out quarterly dividends of $85 million [14] - For 2026, the company projects that the Annuities, Life Insurance, Group Protection, and Retirement Plan Services units will account for 55-65%, 10-15%, 20-30%, and 5-15% of total operating income, respectively [15]

Financial Data and Key Metrics Changes - The company reported third quarter adjusted operating income available to common stockholders of $397 million, or $2.04 per share, marking a year-over-year growth for the fifth consecutive quarter [22][21] - Net income available to common stockholders was $411 million, or $2.12 per diluted share, with a notable difference from adjusted operating income primarily due to changes in fair value and non-operating income [22][23] - The annualized return on alternative investments was just under 10%, amounting to $101 million after tax, slightly below the target [22] Business Line Data and Key Metrics Changes - Annuities business reported sales of $4.5 billion, marking the fourth consecutive quarter of increased sales, with spread-based products representing 63% of the new business total [9][10] - Life insurance earnings reached $54 million, significantly improving year-over-year, with sales totaling nearly $300 million, driven largely by executive benefits [13][14] - Group protection delivered earnings consistent with the prior year, with a 5% year-over-year premium growth and nearly 40% sales growth across market segments [16][17] - Retirement Plan Services achieved operating income of $46 million, up from $44 million in the prior year, with total deposits increasing by 20% year-over-year [31][18] Market Data and Key Metrics Changes - The annuities business saw a 36% year-over-year increase in fixed annuity sales, while registered index-linked annuities (RILA) sales increased by 21% [10][11] - Group protection's premium growth was broad-based, with supplemental health increasing by 33% year-over-year [17] - Retirement Plan Services reported a 5% year-over-year increase in account balances, reaching $123 billion, with net inflows totaling $755 million [33][31] Company Strategy and Development Direction - The company is focused on increasing risk-adjusted returns, reducing result volatility, and growing its franchise, with a clear strategy for profitable growth [5][6] - The annual Assumption Review indicated a small favorable impact on adjusted operating income, reflecting alignment between underlying experience and future expectations [8][25] - The company is transitioning to retaining all fixed annuity business, which is expected to enhance spread-based earnings over time [39][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and the effectiveness of its strategic initiatives, emphasizing the importance of disciplined execution [20][21] - The company anticipates some variability in results but remains optimistic about long-term growth potential across all business lines [19][18] - Management highlighted the importance of maintaining a strong capital position and the disciplined deployment of excess capital to enhance risk-adjusted returns [39][42] Other Important Information - The company ended the quarter with an estimated RBC ratio well above the 420% buffer, maintaining a strong excess capital position [39] - The investment portfolio showed solid results, with 97% of investments rated investment grade and a focus on private credit and structured strategies [42][43] Q&A Session Summary Question: Drivers of improved Life earnings and future outlook - Management noted that the quarter reflected stable performance for the life insurance block, with mortality and alternative investment returns aligning with expectations, indicating a positive growth trajectory [48][49][54] Question: Capital plans and share repurchase program - Management indicated that detailed capital plans and free cash flow outlook would be discussed in the fourth quarter earnings call, expressing confidence in the company's direction and metrics [55][56] Question: Group protection margin expectations - Management affirmed a positive outlook for group protection, with expected margin improvements and continued premium growth, despite some normalization in disability trends [59][60][74]

Financial Performance - Adjusted operating income increased by 13% year-over-year, driven by a diversified business mix[7, 14] - Life Insurance operating income reached $54 million, benefiting from stable mortality and higher investment income[7, 14] - The leverage ratio improved by 320 basis points year-over-year to 252%, primarily due to equity growth[7, 14] Sales and Account Balances - Annuities total sales increased by 32% year-over-year to $45 billion[14, 21] - Retirement Plan Services achieved first-year sales of $24 billion, up almost 50% year-over-year[14, 30] - Group Protection sales increased by 38% year-over-year, diversified across segments and products[14, 27] - Annuities account balances grew 5% year-over-year, reaching a record $174 billion[7, 26] Capital and Risk Management - The estimated RBC ratio is greater than 420%, exceeding the 20 percentage point capital buffer above the 400% target[14] - The investment portfolio is well-diversified, with 97% of assets rated as investment grade[55, 58, 62] - New money yield achieved 59%, approximately 130 basis points above the portfolio yield[55]

Core Insights - Lincoln National Corporation (LNC) is well-positioned for growth, driven by strong performance in its Annuities and Group Protection segments, new product introductions, effective expense management, and a solid financial foundation [1][10] - LNC's stock has increased by 29.4% year-to-date, significantly outperforming the industry's average gain of 1.2% [1][11] Company Overview - Headquartered in Radnor, PA, Lincoln National has a market capitalization of $7.8 billion and operates in diversified life insurance and investment management, offering a range of products across four segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services [2] - The company's trailing 12-month price-to-book (P/B) ratio is 0.91X, lower than the industry average of 1.93X [2] Financial Performance and Estimates - The Zacks Consensus Estimate for LNC's 2025 earnings is $7.48 per share, reflecting a 5.8% year-over-year increase, with revenues estimated at $18.9 billion [4] - LNC has consistently beaten earnings estimates in the past four quarters, with an average surprise of 15.7% [4] Revenue Growth Drivers - LNC's revenue growth is supported by a balanced business mix, increased insurance premiums, and fee income [5] - The annuity segment's total sales grew by 17.2% year-over-year to $7.8 billion in the first half of 2025, with a shift towards a more balanced mix of spread-based products [6] - The Group Protection segment saw a 30.5% year-over-year increase in income from operations in the first half of 2025, with improved underwriting results and an operating margin increase of 180 basis points [7] Strategic Initiatives - Lincoln National aims to enhance future growth by strengthening distribution leadership and expanding into broader markets, focusing on a customer-first model [8] - The company is enhancing core capital generation by allocating resources to strengthen competitive advantages and drive long-term growth in free cash flow [9] Financial Stability - As of June 30, 2025, LNC had $7.1 billion in cash and invested cash, a 23.1% increase from the end of 2024, indicating a strong financial position [10] - The company's dividend yield stands at 4.4%, higher than the industry's average of 3.3% [10]

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]

Lincoln National (LNC 11.43%), a major provider of insurance, annuities, and retirement plan services, released its second quarter results on July 31, 2025. The standout headline was non-GAAP earnings per share of $2.36 in Q2 2025, exceeding analyst expectations by 25.5%. However, non-GAAP revenue was $4.308 billion, falling short of the $4.66 billion consensus estimate by 7.6%. The report showed clear improvement in operating margins and segment performance, especially in Group Protection, where operating ...

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]

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]

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].

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]