Unum, a provider of financial protection benefits in the U.S. and U.K., released its second quarter earnings report Wednesday with results that reflect a strong quarter. The company’s core businesses – Unum US, Unum UK and Colonial Life - produced higher year-over-year operating earnings with some very encouraging sales trends, said officials. Overall, operating earnings per share rose 11 percent, which keeps the company at the upper end of its outlook for the year.
After-tax operating income for the quarter was $234.8 million, or 91? per share, compared to $218.5 million, or 82? per share, in the second quarter of 2013. Net income was $242.5 million, or 94? per share, compared to $218.6 million, or 82? a share, a year ago.
Details are in the attached earnings announcement, including a reconciliation of non-GAAP financial measures, but here are some highlights from the quarter, said officials:
•Operating income for Unum US rose slightly to $218.8 million, an increase of 2.2 percent over the second quarter of last year. In addition, sales for Unum US increased 40 percent, a sharp jump from last year when market activity was much slower, in large part due to the implementation of healthcare reform.
•Unum UK continued to deliver solid year-over-year margin improvement and earnings growth, with an 8.3 percent increase in operating income (in local currency). While sales were down about 11 percent, persistency is trending higher relative to the first quarter of this year and premium income rose.
•Colonial Life also delivered strong results, with operating income increasing 5.9 percent to $75.3 million. These solid results were driven by stable risk results and solid premium growth. Sales increased again this past quarter, with a 7.7 percent increase over last year’s results.
•The overall results of our Closed Block, which consists of individual disability and long-term care products which Unum no longer sell but still service, were strong this quarter. Long-term care continues to be a difficult business to manage, especially in this low interest rate environment.
•The company’s investment portfolio remains in excellent shape, but it, too, is challenged by today’s low interest rates.
•Finally, the company’s capital position is strong, giving Unum significant financial flexibility. The company bought back another $100 million of its stock during the quarter.
“It was another very good quarter for us, rounding out a strong first half of the year,” said President and CEO Tom Watjen. “We are well-positioned to capitalize on the opportunities ahead to profitably grow our business by continuing to focus on the things that have contributed to our past success – solid plans, disciplined execution of these plans, and our employees doing their part to support our customers and business.”