It has been about a month since the last earnings report for Globe Life (GL). Shares have added about 3.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Globe Life due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Globe Life Q4 Earnings Surpass Estimates on Higher Premium
Globe Life Inc.’s fourth-quarter 2024 net operating income of $3.14 per share beat the Zacks Consensus Estimate by 1.3%. The bottom line improved 12% year over year, primarily driven by higher excess investment income and insurance underwriting income. The company reported operating revenues of $1.4 billion, up 4.4% from the year-ago quarter. The improvement was driven by growth in life premium, health premium, net investment income, and other income. The top line missed the Zacks Consensus Estimate by 1%. The quarterly results reflected higher premiums at both the life and health segments, improved net sales and higher investment income. Higher expenses partially offset the upside.
Globe Life reported total premium revenues of $1.18 billion, up 4.5% year over year. This upside was primarily driven by higher premiums from Life and Health insurance. Net investment income increased 4% year over year to $282.4 million. Excess investment income, a measure of profitability, rose 7% year over year to $38.3 million.
Total insurance underwriting income grew 3.1% year over year to $337.9 million. The increase was due to improved Life underwriting income. Administrative expenses increased 18.3% year over year to $91.4 million. Total benefits and expenses rose 7% year over year to $1.1 billion, primarily due to higher total policyholder benefits, amortization of deferred acquisition costs, commissions, premium taxes, and non-deferred acquisition costs, other operating expense and interest expense.
Premium revenues at Life increased 4% year over year to $822.9 million, driven by higher premiums written by distribution channels like American Income and Liberty National Division. American Income grew 7% and Liberty National rose 5%. Net sales of $144.9 million increased 11% year over year. Underwriting margins improved 10% year over year to $336 million.
Health insurance premium revenues rose 7% year over year to $358.3 million, primarily driven by higher premiums from United American, Family Heritage, Liberty National and Direct to Consumer. Net health sales increased 6% year over year to $73.6 million. Underwriting margins decreased 6.4% year over year to $91.2 million.
Shareholders’ equity, excluding accumulated other comprehensive income (AOCI), as of Dec. 31, 2024, increased 1% year over year to $7.34 billion. As of Dec. 31, 2024, Globe Life reported book value per share, excluding AOCI, of $86.40, up 13.4% year over year. Net operating return on equity, excluding AOCI, was 15.1% for the 12 months ended Dec. 31, 2024, which expanded 40 basis points year over year.
Globe Life repurchased 0.33 million shares worth $36 million in the reported quarter.
Full-year 2024 net operating income of $12.37 increased 16% year over year.
Total operating revenues rose 5.2% from the year-ago quarter to $5.8 billion.
GL estimates net operating income in the range of $13.45-$14.05 per diluted common share for the year ending Dec. 31, 2025.
It turns out, fresh estimates have trended upward during the past month.
At this time, Globe Life has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Globe Life has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
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