Unum President and CEO Tom Watjen delivers the keynote address in this 2013 file photo.Unum Group met Wall Street earnings expectations for the first quarter and was ahead of its earnings for the same period last year.
"It was a good start to the year," Unum CEO Tom Watjen wrote in a letter to employees on Wednesday. "Many of the favorable growth and profitability trends we experienced in 2014 have carried over."
Among them, strong sales and premium growth, he noted.
The Chattanooga-based company had "outstanding" sales growth across its core businesses, mainly through adding new customers and expanding its services for those it already had, he wrote.
Specifically, Unum's after-tax operating income of $224.8 million, or 89 cents per share for the first quarter of 2015, compared to $222.6 million, or 85 cents per share, for the first quarter of 2014. Net income was $212.9 million, or 84 cents per share, down slightly compared to a year ago when it was $225.8 million, or 86 cents per share.
The company bought back $108 million of its stock, 3.2 million shares, during the quarter, bringing the total repurchased to almost $3 billion since 2007. It had a fewer average number ofshares outstanding for the first quarter of this year, 252.2 million, compared with the same period a year ago, 260.7 million.
Unum, a leading provider of workplace financial-protection benefits, saw operating income in its U.S. division rise 3.3 percent from a year ago, to $214.3 million. Sales shot up 17 percent, and premium income grew nearly 7 percent, which was the highest in years for the company.
Operating income for the quarter for Unum UK was down slightly from a year ago, at $32.6 million, due primarily to interest-rate pressures, the company reported.
Continued low interest rates still challenge the company, which gets about a quarter of its revenue from investment income. Still, the credit quality of Unum's investment portfolio remains strong, according to Watjen.
"I'm confident we're taking the right steps to manage through this difficult environment, including remaining disciplined in our asset selection," he told employees.
Watjen in February announced his retirement as company CEO, effective at the company's shareholders meeting next month. On Wednesday, he said that the company's management transition was going well.
Richard "Rick" McKenney, who had been Unum's chief financial officer, on April 1 became Unum's president. Jack McGarry, who was Unum's president and CEO of its closed-block division, became chief financial officer. McKenney takes over as CEO at the conclusion of Unum's May 21 annual shareholder meeting, when Watjen becomes chairman of the board of directors.
Contact staff writer Mitra Malek at mmalek@timesfreepress.com or 423-757-6406. Follow her on Twitter @MitraMalek.