Lincoln National Posts Profit In Q3 - Update

Wed. October 28, 2009; Posted: 08:10 PM

Look up the PowerRating of LNC and see how it has performed over the past week as well as the current proprietary PowerRating.

(RTTNews) - Lincoln National Corp. (LNC | Quote | Chart | News | PowerRating), Wednesday reported a profit for the third quarter after three consecutive quarters of losses. The quarterly results benefited from a one-time gain related to an asset sale. Following the news, the company's shares gained more than 9% in the after-hours trading.

The Radnor, Pennsylvania-based provider of insurance and investment management businesses posted net income available to common stockholders of $137.0 million or $0.44 per share for the third quarter, compared to $148.3 million or $0.58 per share in the prior year quarter.

The result for the quarter under review included a positive adjustment of $55 million or $0.18 per share, after tax, related to the sale of Lincoln National (UK | Quote | Chart | News | PowerRating) Plc. The result also included realized investment losses of $42 million or $0.14 per share, after tax, and a loss of $151 million or $0.49 per share, after tax, due to the non-performance risk factor on the variable annuity hedge program.

Income from operations fell to $276 million or $0.84 per share from $298 million or $1.16 per share in the previous year quarter, due to lower average variable account values, and a modest loss on alternative investments.

On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the third quarter. Analysts' estimates typically exclude special items.

Third quarter revenues decreased 8% to $2.08 billion from $2.27 billion in the same quarter last year. Five analysts had a consensus revenue estimate of $2.44 billion for the third quarter.

The Individual Annuities segment reported income from operations of $95 million, down from $131 million in the year-ago quarter, hurt by lower average variable account balances. However, operating income from the Defined Contribution segment rose to $43 million from $42 million in the prior year quarter.

Life Insurance's income from operations remained flat at $137 million, while that of Group Protection grew to $35 million from $27 million a year earlier.

The operating loss in Other Operations was $33 million in the quarter, compared to $40 million in the prior year quarter.

Income from operations in the third quarter of 2009 included a loss on alternative investments of $1 million, compared to income of $12 million last year.

Consolidated deposits dropped by 2% to $5.3 billion over a year ago. Consolidated net flows soared 34% year-over-year to $2.3 billion.

During the quarter, Lincoln National completed the sale of Lincoln National Plc for GBP 195 million pounds Sterling in cash.

Also in the quarter, the company agreed to sell its asset management unit, Delaware Management Holdings, Inc. and its subsidiaries, to Sydney, Australia-based financial firm Macquarie Group (MQBKY.PK, MQG.AX) for about US$428 million or A$516 million in cash.

With the deal, the company aims to focus on its Core Insurance and Retirement businesses.

The company said today that it is on track to complete the sale of Delaware Investments at or around year-end.

For the nine-month period of 2009, Lincoln National reported a loss available to common stockholders of $603.4 million or $2.21 per share, compared to income of $561.7 million or $2.16 per share in the previous year period.

Income from operations dropped to $645.8 million or $2.27 per share from $905.4 million or $3.48 per share in the prior year period.

Revenues for the period decreased to $6.10 billion from $7.07 billion in the prior year period.

Lincoln National closed Wednesday's regular trading session at $22.25, down $1.31 or 5.56% on a volume of 9.84 million shares. In the after-hours, the shares gained $2.05 or 9.21%.

For full details on Lincoln National Corp (LNC) click here. Lincoln National Corp (LNC) has Short Term PowerRatings of 5. Details on Lincoln National Corp (LNC) Short Term PowerRatings is available at This Link.

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