ING U.S. Inc., the insurer being divested by its Dutch parent, posted the biggest advance in the Russell 1000 index after third-quarter operating earnings climbed 61 percent, beating analysts’ estimates.
ING U.S. gained 8.5 percent to $33.59 at 4:15 p.m. in New York, the largest jump since May. The company rallied 72 percent since ING Groep NV sold shares for $19.50 apiece in May.
Operating earnings, which exclude some investments and results of variable annuities that ING U.S. no longer sells, increased to $282.8 million, or $1.08 per share, from $175.9 million a year earlier, the company said in a statement today. Analysts had estimated 66 cents a share, according to a Bloomberg survey. Rising stock markets and increased investments from customers added to profits from asset management.
ING U.S. “demonstrated solid performance from its ongoing business and a faster-than-expected pace of improvement in the closed block variable-annuity unit,” Mark Palmer, an analyst at BTIG LLC, said in a research note on the New York-based company. He upgraded the shares to buy from neutral.
The insurer is planning to rebrand as Voya Financial, and is being divested by ING Groep as a condition of the Amsterdam-based company’s bailout. ING Groep controls about 57 percent of the U.S. unit after two share sales this year. The parent, which also reported results today, climbed 3.5 percent in Amsterdam.
The return on equity at ING U.S.’s main unit was 9.9 percent this year through Sept. 30, compared with 8.3 percent in all of 2012, the company said. The insurer is on pace to achieve its target of at least 12 percent by 2016, Chief Executive Officer Rodney Martin, 61, said in the statement.