A month has passed by for the reason that final earnings report for Solar Life (SLF). Shares have added about 9% in that timeframe, outperforming the S&P 500.
Will the current optimistic pattern proceed main as much as its subsequent earnings launch, or is Solar Life due for a pullback? Earlier than we dive into how traders and analysts have reacted as of late, let’s take a fast take a look at its most up-to-date earnings report with the intention to get a greater deal with on the essential drivers.
Solar Life Q2 Earnings Beat, Revenues Miss Estimates
Solar Life Monetary delivered second-quarter 2024 underlying internet earnings of $1.25 per share, which beat the Zacks Consensus Estimate by 5.9%. The underside line elevated 6.8% yr over yr. Underlying internet earnings was $730.8 million (C$1 billion), which elevated 9% yr over yr.
Outcomes mirrored continued strong progress in Canada and Asia. The U.S. additionally noticed favorable expertise in Group Advantages, partially offset by residual headwinds in dental.
Revenues of $6.5 billion elevated 14.2% yr over yr however missed the Zacks Consensus Estimate by 3%.
Wealth gross sales & asset administration gross flows of $33.8 billion (C$46.3 billion) elevated 9.1% yr over yr. Group – Well being & Safety gross sales of $362.5 million (C$496 million) decreased 17.7% yr over yr. Particular person – Safety gross sales of $550.3 million (C$753 million) jumped 24.7% yr over yr.
New enterprise contractual service margin (CSM) was $319.4 million (C$437 million), up 61.9% yr over yr.
Phase Outcomes
SLF Canada’s underlying internet earnings elevated 8% yr over yr to $294 million (C$402 million). Canada witnessed strong outcomes at Wealth & Asset Administration and Particular person – Safety.
Wealth gross sales & asset administration gross flows of $3.6 billion ($5 billion) climbed 72% yr over yr. Group – Well being & Safety elevated yr over yr however Particular person – Safety gross sales declined.
SLF U.S.’ underlying internet earnings was $149 million, which decreased 5% yr over yr, reflecting smooth outcomes at Particular person – Safety and Group – Well being & Safety.
U.S. group gross sales of $243 million decreased 22%, reflecting decrease Medicare and Medicaid gross sales in Dental because of massive institutional gross sales within the prior yr, partially offset by increased medical stop-loss gross sales.
SLF Asset Administration reported underlying internet earnings of $224.3 million (C$307 million), which elevated 4% yr over yr, attributable to secure leads to MFS. Asset Administration exited the reported quarter with $0.8 trillion (C$1.072 trillion) of AUM, comprising $618 billion in MFS and $165.9 billion (C$227 billion) in SLC Administration.
SLF Asia reported underlying internet earnings of $130.8 million (C$179 million), which grew 19% yr over yr, pushed by strong outcomes at Wealth & asset administration and Particular person – Safety.
Particular person gross sales of $428 million (C$586 million) jumped 30% yr over yr. Wealth gross sales & asset administration gross flows of $1.5 billion ($2 billion) elevated 24% yr over yr. New busines
New enterprise CSM of $160.8 million (C$220 million) elevated 86.4% yr over yr, primarily pushed by gross sales in Hong Kong.
Monetary Replace
International property underneath administration have been $1.1 billion (C$1.465 trillion), up 7% yr over yr.
Solar Life Assurance’s Life Insurance coverage Capital Adequacy Check (LICAT) ratio was 142% as of Jun 30, 2024, up 300 foundation factors (bps) from Jun 30, 2023, degree.
The LICAT ratio for Solar Life (together with money and different liquid property) was 150%, which expanded 20 bps yr over yr.
Solar Life’s return on fairness was 11.7% within the second quarter of 2024, which contracted 100 bps yr over yr. The underlying return on fairness of 18.1% expanded 40 bps yr over yr. The leverage ratio of twenty-two.61% improved 70 bps from Jun 30, 2023, degree.
Dividend Replace
The corporate’s board of administrators authorized a quarterly dividend of 81 cents per share. The quantity will likely be paid out on Sep 27, 2024, to shareholders of document on the shut of enterprise on Aug 28.
How Have Estimates Been Transferring Since Then?
It seems, recent estimates flatlined in the course of the previous month.
VGM Scores
At the moment, Solar Life has a subpar Progress Rating of D, nonetheless its Momentum Rating is doing lots higher with a B. Following the very same course, the inventory was allotted a grade of B on the worth facet, placing it within the high 40% for this funding technique.
Total, the inventory has an combination VGM Rating of C. In case you aren’t centered on one technique, this rating is the one you have to be thinking about.
Outlook
Solar Life has a Zacks Rank #3 (Maintain). We anticipate an in-line return from the inventory within the subsequent few months.
Efficiency of an Business Participant
Solar Life belongs to the Zacks Insurance coverage – Life Insurance coverage trade. One other inventory from the identical trade, Voya Monetary (VOYA), has gained 7.6% over the previous month. Greater than a month has handed for the reason that firm reported outcomes for the quarter ended June 2024.
Voya reported revenues of $324 million within the final reported quarter, representing a year-over-year change of -6.6%. EPS of $2.27 for a similar interval compares with $2.31 a yr in the past.
For the present quarter, Voya is predicted to publish earnings of $2.18 per share, indicating a change of +5.3% from the year-ago quarter. The Zacks Consensus Estimate has modified -0.1% over the past 30 days.
Voya has a Zacks Rank #3 (Maintain) primarily based on the general route and magnitude of estimate revisions. Moreover, the inventory has a VGM Rating of D.
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Free: See Our Top Stock And 4 Runners Up
Sun Life Financial Inc. (SLF) : Free Stock Analysis Report
Voya Financial, Inc. (VOYA) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
