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Lincoln Financial: A $710 Million Swing from Black to Red

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Lincoln Financial announced yesterday a fourth quarter net income loss of $514 million compared to a net income of $196 million in 2010, a $710 million swing from black to red.

For the full year, the Radnor PA based insurance and asset management company’s net income plunged 64% to $290 million, from $812 million in 2010.

Operating income was up in the fourth quarter 2011 at $303 million compared with $266 million in 2010. Lincoln said the discrepancy between net income and income from operations was the consequence of a $747 million non-cash goodwill impairment charge related to the life insurance and media business.

For the full year, variable annuity deposits were up 6% to $8.7 billion. Retirement Plan Services net flows were at $0.5 billion compared to $0.3 billion in 2010. Life insurance sales were up 10% to $700 million and there was a group protection loss ratio of 72.9% compared to 76.2% in 2010.

In the fourth quarter, individual annuities reported income from operations of $134 million compared to $123 million in 2010 while gross annuity deposits were down 8% to $2.4 billion due to low interest rates rendering fixed annuities less desirable.

Retirement plan services reported income from operations of $35 million, up $2 million from the same period a year ago.

Life insurance sales in fourth quarter increased 11% from the same period last year to $229 million. Sales for the full year increased 10% to $700 million. Lincoln said the results were indicative of a decline of secondary guarantee universal life sales as pricing was altered to downplay single premium policies and shift their focus to other products. Life insurance in force of $580 billion grew 3% and account values of $35 billion increased 5% over the prior year quarter.

“We continue to give priority to relative returns in our capital allocation and business decisions, balancing reinvestment in our core businesses with the opportunity to create value through increased share repurchases,” said President and CEO Dennis R. Glass.


In other earnings news

Prudential Financial Inc., Newark NJ, announced a net income for 2011 of $3.531 billion, or $7.22 per Common share. The same period last year saw net income at $5.75 per Common share. 

Operating income adjusted after taxes for the Financial Services Businesses in 2011 was $3.134 billion or $6.41 per Common share compared to $6.17 in 2010.

In dividend news

Manulife Financial Coproration’s Board of Directors announced a quarterly shareholder’s dividend of $0.13 per share on the common shared of Manulife Financial Corporation, payable on and after March 19, 2012 to shareholders of record at the close of business on February 22, 2012.

The Board also declared dividends on the following non-cumalitve preferred shares, payable on or after March 19, 2012 to shareholders of record at the close of business on February 22, 2012

  • Class A Shares Series 1 – $0.25625 per share
  • Class A Shares Series 2 – $0.29063 per share
  • Class A Shares Series 3 – $0.28125 per share
  • Class A Shares Series 4 – $0.4125  per share
  • Class 1 Shares Series 1-  $0.35     per Share
  • Class 1 Shares Series 3-  $0.2625  per share
  • Class 1 Shares Series 5-  $0.313425 per share