Unum's earnings exceed estimate

Unum's earnings exceed estimate

April 30th, 2009 by Mike Pare in Business

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Despite the tough economy, Unum Group posted higher first-quarter earnings Wednesday and topped analysts' estimates as its Unum US business reported increased income over a year ago.

"Each of our businesses performed well as we continue to benefit from the actions we have taken over the past several years," said Thomas R. Watjen, the Chattanooga-based insurer's chief executive.

After-tax operating income was $206.7 million, or 62 cents per share. It earned 59 cents per share a year ago, according to Unum.

The consensus analyst estimate was that Chattanooga's biggest company with almost 3,000 workers would earn 60 cents per share in the most recent period.

Net income was $164.9 million, or 50 cents per share, compared with $163.1 million, or 46 cents per share, in the first quarter 2008, the company reported after the market's close.

Unum US reported operating income of $183.6 million in the first quarter compared with $158.3 million a year ago.

Martha Butler of Fitch Ratings said Unum's group disability insurance claims trend was lower than in the fourth quarter.

"Despite where the economy is, I think that is pretty good performance," she said.

Shellie Stoddard of Standard & Poor's also cited the lower claims trend.

"That's contrary to what we'd expect to see with some creeping tied to the economy," she said.

Ms. Butler said it had some investment losses in the period but nothing way out of line.

The company reported net realized after-tax investment losses of $41.8 million, or 12 cents per share, versus losses of $44.7 million, or 13 cents per share, a year ago.

Mr. Watjen said the company expects a challenging economic environment to continue into 2010, and it has the financial flexibility to provide for both uncertainties and opportunities.

"Although we are generally pleased with our results, this is no time to lose focus," he said.

Unum's shares closed at $16.11, up 81 cents, or 5.29 percent.