Unum Group operating profits rose in the third quarter by 5.8 percent from a year ago to $223 million, or 91 cents per share.
The after-tax operating income reported by Unum was a penny per share better than analysts’ forecasts. But Unum’s revenues in the three months, $2.66 billion, were $20 million short of what industry analysts had expected for the Chattanooga-based disability insurer.
Net income, which included losses on the company’s investment portfolio and company pension plans, declined by 7 percent from a year ago to $203.8 million, or 83 cents per share, in the three months ended Sept. 30.
“We had a very good third quarter, highlighted by continued growth in our core business segments, combined with strong profit margins,” Unum CEO Richard P. McKenney said in his quarterly report released after the market closed Wednesday. “These results continue to drive strong capital generation which we actively redeployed in the third quarter through investing in organic growth, acquiring an attractive dental business for our U.K. operations and returning capital to our shareholders through share repurchases and dividends.”
The Chattanooga-based Unum, the world’s biggest disability insurer, boosted overall sales by nearly 9 percent across the company, including double-digit growth at both Unum US and Colonial Life. Unum U.S. sales increased by just under 10 percent, with favorable results in the large case market. At Colonial Life, sales increased 11 percent while Unum sales in the United Kingdom were flat in the quarter.
“There’s a lot going well at our company strong growth trends, solid product margins and good execution,” McKenney said in a letter to Unum employees.
Unum shares have fallen 2 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 1.5 percent. Unum shares rose $1.35, or 4.13 percent, to close at $34.13, prior to the release of the third quarter results.
Unum shares jumped after the Federal Reserve Bank boasted that it could raise interest rates in December, which would help boost earnings from Unum’s investment portfolio.