Horace Mann Educators Earnings: Here’s Why Investors are Ambivalent Now

Horace Mann Educators Corp. (NYSE:HMN) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

Horace Mann Educators Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 143.75% to $0.39 in the quarter versus EPS of $0.16 in the year-earlier quarter.

Revenue: Rose 4.47% to $265.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Horace Mann Educators Corp. reported adjusted EPS income of $0.39 per share. By that measure, the company beat the mean analyst estimate of $0.32. It beat the average revenue estimate of $249.5 million.

Quoting Management: “Horace Mann’s second quarter operating income was $0.39 per share, a solid result considering the higher than anticipated level of catastrophe losses in the quarter,” said Horace Mann’s President and CEO Peter H. Heckman. “Compared to the second quarter and first six months of 2012, both the reported and underlying property and casualty combined ratios improved, while written and earned premiums increased 3%. In our annuity segment, assets under management increased 10% over prior year, more than offsetting the modest impact of spread compression, with deferred policy acquisition cost unlocking also benefitting the quarterly earnings comparison to prior year. In the life segment, second quarter sales of Horace Mann products increased 31% compared to a year earlier, with the anticipated decline in earnings reflecting more normalized mortality losses and a slight decrease in investment income.”

Key Stats (on next page)…

Revenue increased 4.35% from $254.53 million in the previous quarter. EPS decreased 29.09% from $0.55 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.49 to a profit $0.46. For the current year, the average estimate has moved down from a profit of $1.95 to a profit of $1.93 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)