A month has gone by since the last earnings report for Globe Life (GL). Shares have lost about 3.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Globe Life due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Globe Life Inc. before we dive into how investors and analysts have reacted as of late.
Globe Life Q3 Earnings Beat Estimates on Solid Underwriting
Globe Life Inc.’s third-quarter 2025 net operating income of $4.81 per share beat the Zacks Consensus Estimate by 5.9%. The bottom line improved 38% year over year, primarily driven by higher insurance underwriting income.
Behind the Headlines
Globe Life reported total premium revenues of $1.2 billion, up 5% year over year. This upside was primarily driven by higher premiums from Life and Health insurance. Net investment income increased 0.3% year over year to $286 million.
The company reported operating revenues of $1.5 billion, up 4.1% from the year-ago quarter. The improvement was driven by growth in Life and Health insurance premiums, higher net investment income and other income. The top line missed the Zacks Consensus Estimate by 0.1%. Excess investment income, a measure of profitability, decreased 7% year over year to $38.6 million.
Total insurance underwriting income increased 30% year over year to $503.1 million. The increase was due to higher Life and Health underwriting income.
Administrative expenses were up 1.5% year over year to $89.7 million. Total benefits and expenses decreased 3.9% year over year to $1 billion, primarily due to lower total policyholder benefits.
Segmental Results
Premium revenues at Life increased 3% year over year to $844.5 million, driven by higher premiums written by distribution channels like American Income and Liberty National. American Income and Liberty National both rose 5%, respectively. Net sales of $150.5 million increased 2% year over year. Underwriting margins increased 24% year over year to $481.6 million.
Health insurance premium revenues rose 9% year over year to $386.5 million, primarily driven by higher premiums from United American, Family Heritage, American Income and Direct to Consumer. Net health sales increased 21% year over year to $71.42 million. Underwriting margins increased 25% year over year to $108.3 million.
Financial Update
Shareholders’ equity, excluding accumulated other comprehensive income (AOCI), as of Sept. 30, 2025, increased 7.5% year over year to $7.66 billion.
As of Sept. 30, 2025, Globe Life reported book value per share, excluding AOCI, of $93.63, up 11.5% year over year. Operating return on equity, excluding AOCI, was 16.6% for the nine months ended Sept. 30, 2025, which expanded 130 basis points year over year.
Share Repurchase
Globe Life repurchased shares worth $113 million in the reported quarter.
2025 and 2026 View
GL estimates net operating income between $14.40 and $14.60 for the year ending Dec. 31, 2025. For the year ending Dec. 31, 2026, GL projects net operating income per share in the range of $14.60 to $15.30.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Globe Life has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock has a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Globe Life has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Globe Life Inc. (GL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
