Jefferson Pilot Reports 14 Percent Increase in Third-Quarter Earnings Per Share Before Realized Investment Gains, 9 Percent Incr
28 October 2003 - 10:40AM
PR Newswire (US)
Jefferson Pilot Reports 14 Percent Increase in Third-Quarter
Earnings Per Share Before Realized Investment Gains, 9 Percent
Increase in Net Income Per Share GREENSBORO, N.C., Oct. 27
/PRNewswire/ -- Jefferson-Pilot Corporation , parent of the
Jefferson Pilot Financial companies and one of the nation's leading
providers of universal and variable universal life insurance and
annuities, today reported results for the third quarter of 2003.
Jefferson Pilot earned $0.91 per share before realized investment
gains in the quarter, up 14 percent from third-quarter 2002
earnings before realized gains of $0.80. Net income per share for
the third quarter of 2003 increased 9 percent to $0.88, including
net realized investment losses of $0.03 per share, versus net
income per share of $0.81 in the third quarter of 2002, including
net realized investment gains of $0.01. For the first nine months
of 2003, Jefferson Pilot's earnings before realized investment
gains increased 11 percent to $2.64 per share from $2.38 per share
for the first three quarters of 2002. 2003 year-to-date net income
per share including realized investment losses of $0.02 per share
was $2.62, versus $2.57 including realized investment gains of
$0.19 for the same period last year. In addition to net income, the
company considers earnings before realized investment gains and
losses (or "reportable segment results"), a non-GAAP financial
measure, to be an important indicator of financial performance. We
believe that the combined presentation and discussion of earnings
before realized investment gains and losses, together with net
income, provides relevant and useful information. Earnings before
realized investment gains and losses differs from net income in
that it excludes net after-tax realized investment gains and
losses. All per-share results are on a diluted basis. Jefferson
Pilot's results for the third quarter reflected good asset growth,
continuing robust profitability, and improving investment
performance. Stockholders' equity per share grew 9 percent to
$27.00 from $24.79 at year- end 2002. Because of its strong
profitability and capital resources, Jefferson Pilot was able to
continue buying its common stock, retiring one million shares in
the third quarter. Earnings from Jefferson Pilot's Individual
Products business increased 6 percent in the third quarter to $78.6
million from $73.9 million in the third quarter of 2002. Year to
date, Individual Product earnings were up 5 percent to $228.9
million from $218.4 million in the first nine months of 2002. Year
to date, individual market life insurance sales are up 8%,
demonstrating the continuing success of the Premier Partnering
strategy. Third quarter sales were off from the prior year, in part
reflecting a lag in paid sales caused by new universal life product
introductions. The new and comprehensive series of UL products --
two in the market currently and the last to be issued in early
November -- are responsive to regulatory requirements and shifting
consumer preferences, and will position Jefferson Pilot
competitively across a broad range of needs. Earnings from the
Annuity and Investment Products segment increased 5 percent in the
quarter to $20.0 million from $18.9 million a year earlier. Year to
date, segment earnings were also up 5 percent to $62.7 million from
$59.6 million for the comparable period of 2002. Fixed annuity fund
balance growth was solid in the quarter, rising 7 percent to $8.4
billion from $7.9 billion a year earlier. Third-quarter fixed
annuity sales of $187.8 million, while below third-quarter 2002
sales, showed solid growth compared to the second quarter of 2003,
reflecting good market acceptance of Jefferson Pilot's new equity
indexed products. The Benefit Partners group insurance segment
earned $10.0 million in the third quarter, 9 percent above
third-quarter results last year. Benefit Partners' earnings for the
quarter were reduced by a $2.3 million reserve charge related to a
closed block of medical insurance. Year to date, Benefit Partners'
earnings totaled $34.5 million, including the medical reserve,
versus $34.7 million for the first nine months of 2002. Benefit
Partners' results reflected solid fundamentals in dental, long-term
and short-term disability results, and modest improvement in group
life results. Group life loss ratios improved in the third quarter
from the first half of the year, reflecting adjustments of policy
terms and underwriting in the segments of the life business where
loss ratios have been somewhat higher then expected. Year to date,
total sales are up 16 %, while sales were flat in the third
quarter. Third quarter sales results are expected to compare
favorably to industry results. Jefferson-Pilot Communications'
third-quarter results were excellent, with earnings increasing 17
percent to $11.4 million from $9.8 million in the third quarter of
2002. Nine-month Communications earnings grew 12 percent to $30.0
million from $26.8 million. Broadcast cash flow for the quarter
grew 14 percent to $23.6 million from $20.6 million in the
year-earlier quarter, and increased 8 percent to $62.5 million from
$57.8 million for the first nine months. The Corporate and Other
segment benefited in the quarter from higher income from equity
investments and lower interest expense. Third-quarter earnings
before realized investment gains and losses in the segment
increased to $10.0 million from $4.5 million in the third quarter
last year. Realized net investment losses for the quarter totaled
$3.9 million, reflecting $14.3 million of net realized investment
losses and a $10.4 DAC offset. Bond write-downs were dramatically
lower than in the prior-year quarter, a result of continuing
improvement in the corporate credit environment as well as
proactive portfolio management. Total segment earnings were $6.1
million for the quarter, compared to $7.0 million for the third
quarter a year ago. For the nine months, segment earnings before
realized investment gains and losses were $22.3 million, versus
$17.0 million last year, and total segment earnings amounted to
$19.2 million versus $44.1 million. During the third quarter,
Jefferson Pilot bought 1,000,000 of its shares in the open market
for a total investment of $43.7 million, bringing year-to- date
purchases to a total of 2,500,000 shares at a cost of $102.3
million. Commenting on the quarter, Jefferson Pilot CEO David A.
Stonecipher said "Jefferson Pilot produced excellent results in the
third quarter, with earnings increasing in each of our business
segments. Premier Partnering is continuing to strengthen our
individual life insurance business and to build our key
distribution channels. Our Benefit Partners business showed
progress. Communications' earnings not only were excellent but also
exceeded broadcasting industry norms, as our properties have
continued to excel competitively and increase their market share.
Throughout our operations, our proven ability to execute our
business plans as efficiently as possible is a compelling
competitive advantage, as is Jefferson Pilot's strong balance sheet
and financial flexibility. And, while we strive to build each of
our businesses aggressively, we always remain vigilant about
profitability -- as we demonstrated again this quarter -- with a
view toward maintaining Jefferson Pilot's long and dependable
record of performance for shareholders." Jefferson-Pilot
Corporation, a holding company, is one of the nation's largest
shareholder-owned life insurance companies. Jefferson Pilot's life
insurance and annuity companies, principally Jefferson-Pilot Life
Insurance Company, Jefferson Pilot Financial Insurance Company, and
Jefferson Pilot LifeAmerica Insurance Company, together known as
Jefferson Pilot Financial, offer full lines of individual and group
life insurance products as well as annuity and investment products.
Jefferson-Pilot Communications Company owns and operates three
network television stations and 17 radio stations, and produces and
syndicates sports programming. Additional information on
Jefferson-Pilot can be found at http://www.jpfinancial.com/. In
this release, the terms "operating earnings," "earnings," "segment
earnings," "earned," and "earnings before realized investment gains
or losses," refer to all elements of net income available to common
stockholders except realized gains or losses on sales, write-downs,
or impairments of investments ("realized investment gains or
losses"). Realized investment gains or losses, as defined, are net
of related income taxes, and are reported in the Corporate and
Other segment. This release includes forward-looking statements,
and any forward-looking statements may turn out to be wrong. They
can be affected by inaccurate assumptions or by known or unknown
risks and uncertainties that could affect our actual results
significantly. These risks and uncertainties include, among others,
general economic conditions, the impact on the economy of any
further terrorist activities or any U.S. military engagements, and
interest rate levels, changes and fluctuations, all of which can
impact our sales, investments, and earnings; competitive factors,
including pricing pressures, technological developments, new
product offerings, and the emergence of new competitors; changes in
federal and state taxes; changes in the regulation of the financial
services industry; or changes in other laws and regulations and
their impact. We undertake no obligation to publicly correct or
update any forward-looking statements. Readers are advised to
consult any further disclosures we make on related subjects in our
press releases and filings with the SEC; in particular, see the
section entitled "External Trends and Forward Looking Information,"
and other sections it may reference, in our most recent 10-K report
to the SEC, as it may be updated in our subsequent 10-Q and 8-K
reports. Jefferson-Pilot Corporation and Subsidiaries 2003 Report
Three Months Ended Nine Months Ended Sept 30, 2003 Sept 30, 2002
Sept 30, 2003 Sept 30, 2002 Basic earnings per share available to
common stockholders, before gains (losses) from sale of investments
$ 0.92 $ 0.81 $ 2.66 $ 2.40 Gains (losses) from sale of
investments, net of income taxes (0.03) 0.01 (0.02) 0.19 Basic
earnings per share available to common stockholders $ 0.89 $ 0.82 $
2.64 $ 2.59 Diluted earnings per share available to common
stockholders, before gains (losses) from sale of investments $ 0.91
$ 0.80 $ 2.64 $ 2.38 Gains (losses) from sale of investments, net
of income taxes (0.03) 0.01 (0.02) 0.19 Diluted earnings per share
available to common stockholders $ 0.88 $ 0.81 $ 2.62 $ 2.57
(Dollars in thousands) Income available to common stockholders,
before gains (losses) from sale of investments $129,938 $116,308
$378,402 $356,445 Gains (losses) from sale of investments, net of
income taxes (3,862) 2,448 (3,112) 27,156 Net income available to
common stockholders $126,076 $118,756 $375,290 $383,601 Average
number of shares outstanding 141,365,238 144,641,968 142,063,945
148,017,421 Average number of shares outstanding - assuming
dilution 142,522,449 145,822,346 143,074,780 149,533,658
DATASOURCE: Jefferson-Pilot Corporation CONTACT: John T. Still, III
of Jefferson-Pilot Corporation, +1-336-691-3382 Web site:
http://www.jpfinancial.com/
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