published Wednesday, May 2nd, 2012

Unum misses expectations, boosts dividend

The Unum headquarters in downtown Chattanooga.
The Unum headquarters in downtown Chattanooga.
Photo by John Rawlston.
Follow us on Twitter for the latest breaking news

Disability insurer Unum missed Wall Street's earnings expectations for the quarter but shot off a signal flare of self-confidence by boosting its stock dividend.

The new rate of 13 cents per share will take effect in the third quarter, the company said, when the Chattanooga-based insurer hopes to post better earnings results.

"Today's increase represents the fourth consecutive year we have raised our dividend," said Tom Watjen, president and CEO of Unum. "Since year-end 2007, we have increased our dividend by 73 percent while repurchasing over 20 percent of our outstanding shares."

The good news for stockholders offset lower-than-expected after-tax earnings of $213.2 million, or 73 cents per share, compared to expectations of about 76 cents per share.

Total operating income fell slightly from the first quarter of 2011, when the company earned $219.1 million. But per-share earnings rose from 70 cents because of Unum's ongoing stock buyback program. First quarter revenue rose 1.9 percent over a year ago to $2.61 billion.

"While our Unum US and Colonial Life results were good, the results for Unum UK and our closed block [of business] were weaker than we expected, and both will obviously be areas of focus for our teams." Watjen said in a letter to employees.

The insurer's U.S. unit, which makes up the bulk of its revenue, grew operating income almost 6 percent to $205.9 million from 4 percent premium growth, according to Unum's earnings release. Colonial Life increased its operating income by nearly 5 percent to $69.7 million on premium growth of 6 percent and new sales, the company reported.

But Unum UK's 20 percent decline to $38.8 million in operating income, along with closed block operating income that fell by half over the year to $15.4 million for the quarter, dragged down otherwise good results, Watjen said.

"The solid performance in our Unum US and Colonial Life operations buffered the weaker than expected results in Unum UK and the closed block and allowed us to grow operating earnings per share by 4.3 percent," Watjen said.

Unum expects to grow after-tax income per share by between 6 percent and 12 percent for the year. The stock fell by a penny to close at $23.73 per share on Tuesday.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

Other National Articles

videos »         

photos »         

e-edition »

advertisement
advertisement

Find a Business

400 East 11th St., Chattanooga, TN 37403
General Information (423) 756-6900
Copyright, Permissions, Terms & Conditions, Privacy Policy, Ethics policy - Copyright ©2014, Chattanooga Publishing Company, Inc. All rights reserved.
This document may not be reprinted without the express written permission of Chattanooga Publishing Company, Inc.