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Symetra Financial Misses Estimates on Rising Retirement Sales

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Symetra Financial of Bellevue, Wisc., said its second-quarter 2010 net income was $35.8 million, or $0.26 per share, vs. $47.0 million, or $0.42 per share, in the second quarter of 2009.

Adjusted operating income for the financial-services company was $41.5 million, or $0.30 a share, vs. $45.3 million, or $0.40 per share, in the same quarter a year ago.

The company’s total revenue for the second quarter was $444.4 million.

Analysts were expecting adjusted EPS of $0.33 on sales of $455.76 million.

“Symetra’s second-quarter performance was highlighted by an excellent loss ratio in the group segment and strong fixed annuity sales in retirement services. While the fundamentals of the business performed well, low interest rates continued to limit investment income and constrain earnings,” said President and CEO of Tom Marra.

In retirement, which includes fixed and variable deferred annuities, sales generated $20.6 million in pretax adjusted operating income in second quarter 2010, up from $16.1 million in second quarter 2009.

Total account values reached $9.3 billion at quarter-end, compared with $7.7 billion at the end of second quarter 2009.

Retirement-services sales totaled $623.9 million in the second quarter of 2010, up 10% over sales of $568.5 million in the second quarter 2009.

Sales in this segment grew 65% from first quarter 2010 levels as the company worked with new and existing bank partners to increase penetration and add new Symetra products to their sales platforms, according to the company.

“I see untapped potential at Symetra in several areas — from broadening the financial planning distribution channel and achieving even better product penetration on bank platforms to reinvigorating our individual life insurance business,” Marra said in a statement.

The company is revising its 2010 guidance for full-year adjusted operating income per diluted share to be between $1.15 and $1.30. Factors contributing to this revision include the sustained low interest rate environment and slower deployment of primary proceeds from Symetra’s initial public offering, the company said in a press release.

Symetra is one of the last financial-service companies to report its second-quarter earnings in July.


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