LNC Q2 Earnings Beat Estimates on Rising Insurance Premiums

Lincoln National Corporation LNC reported second-quarter adjusted earnings per share of $2.36, which surpassed the Zacks Consensus Estimate by 23.6%. The bottom line climbed 28.3% year over year.

Adjusted operating revenues grew 4.4% year over year to $4.7 billion. The top line surpassed the consensus mark by 1.2%.

The strong quarterly results were supported by higher insurance premiums, strong annuity deposits and solid Group Protection performance. Higher net investment income, improved mortality results and a decline in total expenses also contributed to the upside. Nevertheless, the positives were partly offset by a decline in income from Annuity and Retirement Plan Services.

Lincoln National Corporation Price, Consensus and EPS Surprise

Lincoln National Corporation price-consensus-eps-surprise-chart | Lincoln National Corporation Quote

Key Takeaways From LNC’s Q2 Results

LNC’s estimated RBC ratio rose to more than 420% at the second-quarter end.

Insurance premiums advanced 3.5% year over year to $1.7 billion, higher than the Zacks Consensus Estimate by 0.3%.

Fee income was $1.3 billion, which improved 0.1% year over year but missed the consensus mark by 1%. Net investment income advanced 10.1% year over year to $1.5 billion, which beat the consensus mark of $1.4 billion.

Meanwhile, other revenues of $197 million rose 1.5% year over year in the quarter under review.

Total expenses declined 21.2% year over year to $3.2 billion. Interest credited rose 7.4% year over year to $916 million.

Lincoln National generated a net income of $699 million compared to the prior-year quarter’s net income of $895 million.

Lincoln National’s Segmental Performances

The Annuities and Life Insurance segments form part of LNC’s Retail Solutions business, while the Group Protection and Retirement Plan Services units make up the Workplace Solutions business.

The Annuities segment’s operating income totaled $287 million in the second quarter, which fell 3% year over year but surpassed the Zacks Consensus Estimate of $282.6 million due to outflows, which decreased traditional variable annuities’ average account balances. The unit's operating revenues rose 0.4% year over year to $1.2 billion, driven by 12% growth in net investment income, partly offset by a 17.6% decline in insurance premiums and a 19% drop in other revenues. Total annuity deposits were $4 billion, which climbed 5.3% year over year.

The Life Insurance unit incurred an operating income of $32 million, improved from the prior-year quarter’s loss of $35 million and the consensus mark of income of $0.5 million. The metric benefited from improved mortality and higher alternative investment income. Operating revenues grew 6% year over year to $1.6 billion. Total Life Insurance sales of $121 million advanced 15% year over year. Total deposits grew 4.1% year over year to $1.3 billion.

The Group Protection segment’s operating income climbed 33.1% year over year to $173 million, higher than the Zacks Consensus Estimate of $129.2 million. The unit was supported by persistent, favorable long-term disability results and continued growth in supplemental health. Operating revenues totaled $1.5 billion in the quarter under review, which improved 6.7% year over year. The metric was driven by a 6.8% rise in insurance premiums. Sales of $187 million rose 16% year over year.

The Retirement Plan Services segment recorded an operating income of $37 million, which declined 8% year over year and lagged the consensus mark of $37.9 million. The metric suffered a blow due to a plan termination effect. Operating revenues inched up 1.2% year over year to $331 million. Total deposits were $3.6 billion, which advanced 9.5% year over year.

Other Operations incurred an operating loss of $91 million, narrower than the year-ago quarter’s loss of $97 million and the Zacks Consensus Estimate of $94.6 million.

Lincoln National’s Financial Update (As of June 30, 2025)

Lincoln National exited the second quarter with cash and invested cash of $7.1 billion, which rose from the 2024-end level of $5.8 billion. Total assets of $399.1 billion rose from the figure at 2024-end of $390.8 billion.

Long-term debt amounted to $5.8 billion, down from the figure of $7.1 billion as of Dec. 31, 2024.

Total stockholders’ equity of $9.5 billion rose from the 2024-end level of $8.3 billion.

Book value per share, excluding accumulated other comprehensive income, was $67.95, which fell from the 2024-end level of $72.06. Adjusted income from operations ROE improved 150 basis points year over year to 12.9%.

LNC’s Dividend Update

Lincoln National paid out quarterly dividends of $77 million.

LNC’s Outlook

Earlier, the Group Protection unit was anticipated to witness a seasonally higher loss ratio in the fourth quarter of 2025. The Life Insurance segment was forecasted to witness favorable mortality results in the third and fourth quarters of 2025.

In 2026, the Annuities, Life Insurance, Group Protection and Retirement Plan Services units were projected to account for 55-65%, 10-15%, 20-30% and 5-15%, respectively, of the company’s total operating income earnings. The four units were likely to make up for 45-55%, 10-15%, 25-35% and 5-15%, respectively, of consolidated operating income over the long term.

Management targets to achieve an RBC ratio of more than 420% in both 2026 and the long term.

LNC’s Zacks Rank & Key Picks

LNC currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader finance space are Virtu Financial Inc VIRT, Marex Group PLC MRX and Acadian Asset Management Inc. AAMI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Virtu Financial’s current-year earnings of $4.53 per share has witnessed four upward revisions in the past 30 days against none in the opposite direction. Virtu Financial beat earnings estimates in each of the trailing four quarters, with the average surprise being 14.9%. The consensus estimate for current-year revenues is pegged at $1.9 billion, implying 18.9% year-over-year growth.

The Zacks Consensus Estimate for Marex Group’s current-year earnings of $3.52 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. Marex Group beat earnings estimates in each of the trailing four quarters, with the average surprise being 26.3%. The consensus estimate for current-year revenues is pegged at $1.8 billion, calling for 12.4% year-over-year growth.

The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.18 per share, implying 15.2% year-over-year growth. In the past 60 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $560.8 million, calling for 10.9% year-over-year growth.

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