Lincoln National (NYSE:LNC)
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From Jun 2019 to Jun 2024

Lincoln National Corp.'s (LNC) third-quarter profit--its first profit in a year--rose 3.3% on a gain from an asset sale.

Shares rose 9.4% to $24.35 in after-hours trading as the life insurer and variable-annuity provider topped Wall Street's expectations and gave a positive report on customer reaction to its revamped annuity products. The stock has quadrupled from a 25-year low last November but is down 20% from its 52-week high two weeks ago.

Chief Executive Dennis Glass pointed to quarter-on-quarter growth in a number of measurements. "We have strengthened our capital position, sharpened our focus on the core insurance and retirement businesses, reinforced our distribution relationships, and updated our product portfolios to better align consumer value, risk management and profitability in today's environment," he added.

In recent quarters, Lincoln has modified its variable annuity products and gave a higher profile to some fixed and indexed products that appeal to more risk-wary customers.

Individual annuity deposits rose from the previous quarter and from a year earlier, helped by the product changes and improvements in distribution, the company said.

Steven Schwartz, an analyst with Raymond James, called the annuity deposits "much better than expected" and said that Lincoln beat his earnings-per-share expectation by about 4 cents after adjusting for one-time items. Lincoln is one of two life insurers that participated in the Treasury Department's Troubled Asset Relief Program, taking $950 million of the government's approved $2.5 billion, and it raised about $1.2 billion in stock and debt sales. Higher investment losses and variable-annuity costs had pushed the company into the red for the past three quarters. In August, Lincoln sold its asset-management business, Delaware Management Holdings Inc., to Macquarie Group, an Australian investment banker, for $428 million.

For the latest quarter, Lincoln reported a profit of $153.3 million, or 44 cents a share, compared with $148.4 million, or 58 cents a share, a year earlier. Operating income, which excludes realized capital gains and losses and other items, fell to 84 cents a share from $1.16.

Revenue slipped 8.3% to $2.08 billion.

Analysts estimated operating earnings of 76 cents on revenue of $2.44 billion, according to a poll by Thomson Reuters.

Lincoln National, which uses Lincoln Financial Group as its marketing name, said its largest segment, individual variable annuities, reported a 28% decrease in earnings. Gross deposits grew 5%.

Meanwhile, life insurance profit was flat and sales fell 23%.

-By Lavonne Kuykendall and Kathy Shwiff, Dow Jones Newswires; (312) 750 4141; lavonne.kuykendall@dowjones.com