Unum Rallies After Beating Estimates on MarginsMarci Jacobs
Unum Group, the largest U.S. provider of disability coverage, gained the most in the 21-company Standard & Poor’s 500 Insurance Index after third-quarter earnings beat analysts’ estimates as profit margins improved.
The insurer rose 2.7 percent to $32.64 at 9:37 a.m. in New York. Shares of the Chattanooga, Tennessee-based company jumped 57 percent this year, more than twice the gain of S&P 500 Index.
Unum reported operating profit of 85 cents a share, beating by three cents the average estimate in a Bloomberg survey of analysts, after raising prices for coverage. Net income for the quarter fell 11 percent to $205.7 million on investment results, Unum said yesterday in a statement.
Results reflect a strategy of “improving profit margins as the company holds the line on pricing and adding of new customers in the U.S.,” Eric Berg, an analyst at RBC Capital Markets, wrote in a research note. “Unum is raising prices on group life in the U.K., where it had been experiencing serious problems, and margins are improving dramatically as a result.”
Editors: Dan Kraut, Peter Eichenbaum