DOW JONES NEWSWIRES
Lincoln National Corp.'s (LNC) third-quarter profit--its first
profit in a year--rose 3.3% on a gain from an asset sale.
Shares rose 3.8% to $23.10 in after-hours trading as the life
insurer and variable-annuity provider's earnings topped Wall
Street's expectations. The stock has quadrupled from a 25-year low
last November but is down 20% from its 52-week high two weeks
ago.
Chief Executive Dennis Glass pointed to sequential growth in a
number of measurements. "We have strengthened our capital position,
sharpened our focus on the core insurance and retirement
businesses, reinforced our distribution relationships, and updated
our product portfolios to better align consumer value, risk
management and profitability in today's environment," he added.
Lincoln is one of two life insurers that participated in the
Treasury Department's Troubled Asset Relief Program, taking $950
million of the government's approved $2.5 billion, and raised about
$1.2 billion in stock and debt sales. Higher investment losses and
variable-annuity costs had pushed the company into the red for the
past three quarters. In August, Lincoln sold its asset-management
business Delaware Management Holdings Inc. to Macquarie Group, an
Australian investment banker, for $428 million.
For the latest quarter, Lincoln reported a profit of $153.3
million, or 44 cents a share, up from $148.4 million, or 58 cents a
share, a year earlier. Operating income, which excludes realized
capital gains and losses and other items, fell to 84 cents a share
from $1.16.
Revenue slipped 8.3% to $2.08 billion.
Analysts estimated operating earnings of 76 cents on revenue of
$2.44 billion, according to a poll by Thomson Reuters.
Lincoln National, which uses Lincoln Financial Group as its
marketing name, said its largest segment, individual variable
annuities, reported a 28% decrease in earnings. Gross deposits grew
5%.
Meanwhile, life insurance profit was flat and sales fell
23%.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com