Primerica, Inc. PRI shares lost 4.3% since it reported fourth-quarter earnings on Feb. 11, 2025, despite an earnings beat. The quarterly results benefited from strong Term Life sales, Investment and Savings Product sales and higher premiums. Growth in policies issued and equity market appreciation also favored the results. However, higher benefits and expenses might have dampened investor confidence in the stock.
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Primerica reported fourth-quarter 2024 adjusted earnings of $5.03 per share, which beat the Zacks Consensus Estimate by 1.4%. The bottom line jumped 18.4% from the prior-year quarter.
The top line increased 9.1% year over year to $790.1 million. The figure beat the consensus mark by 3%.
Primerica, Inc. Price, Consensus and EPS Surprise
Primerica, Inc. Price, Consensus and EPS Surprise
Primerica, Inc. price-consensus-eps-surprise-chart | Primerica, Inc. Quote
Q4 Operational Update
Primerica reported net premiums of $440.3 million in the fourth quarter, up 3.8% from the year-ago level. The metric missed the consensus mark by a whisker. Net investment income rose 1.3% year over year to $38.1 million. The metric missed the consensus mark by 1.6%. Commissions and fees increased 29% from the year-ago period to $293.9 million. It beat the consensus mark by 9.1%.
Total benefits and expenses increased 12.5% in the fourth quarter to $569.6 million due to higher amortization of deferred policy acquisition costs, sales commissions and other operating expenses.
Adjusted net operating income jumped 11% year over year to $169.2 million in the fourth quarter. At December-end, PRI’s total independent life-licensed representatives were 151,611, which rose 7% from a year ago.
Segmental Update
Term Life Insurance: Adjusted operating revenues from the segment increased 4% year over year to $450.6 million. Adjusted operating income before income taxes declined 1% year over year to $139.5 million. The metric missed the consensus mark by 3.9%. The segment was supported by increased policies issued and an increase in adjusted direct premiums.
Investment and Savings Products: Adjusted operating revenues from the segment improved 29% year over year to $286 million. Adjusted operating income before income taxes rose 31% year over year to $82 million. The segment benefited from strong sales and robust equity market appreciation, which gave rise to average client asset values. It beat the consensus mark by 6.5%.
Corporate and Other Distributed Products: Adjusted operating revenues from the unit rose 5% year over year to $53.5 million. Adjusted operating loss before income taxes was $1 million. The segment benefited from higher net investment income, partially offset by increased performance-based employee incentive compensation costs.
Financial Update (as of Dec. 31, 2024)
Primerica exited the fourth quarter with cash and cash equivalents of $687.8 million, which declined from the 2023-end level of $594.1 million. Total assets of $14.6 billion decreased from $15 billion at 2023-end.
Surplus note was $1.3 billion at the fourth-quarter end, down from $1.39 billion at 2023-end.
Total shareholders’ equity of $2.3 billion increased from the 2023-end level of $2.1 billion.
Operating cash flow in the first nine months of 2024 was recorded at $591.4 million, up from $451.5 million in the year-ago period.
Capital Deployment
PRI bought back shares worth $44.4 million in the fourth quarter. A new share repurchase program worth $450 million was authorized, which will run through Dec. 31, 2025.
The company approved a dividend hike of 16% to $1.04 per share, which will be paid on March 14, to shareholders on record as of Feb. 21, 2025.
Full-Year Update
Adjusted operating revenues rose 10% year over year in 2024. Net Investment income rose 14.5% year over year in 2024.
Diluted EPS rose 20% year over year in 2024 to $19.84 per share.
PRI’s Zacks Rank
Primerica currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How Did Other Finance Stocks Perform?
Here are some other stocks in the broader Finance space that have already reported earnings for this quarter: Capital One COF, Golub Capital BDC, Inc. GBDC and Ares Capital Corporation ARCC .
Capital One’s fourth-quarter 2024 adjusted earnings of $3.09 per share surpassed the Zacks Consensus Estimate of $2.66 thanks to higher net interest income and non-interest income and a rise in loans and deposits. Also, provisions declined during the quarter. However, the positives were partially offset by increased expenses.
Golub Capital reported first-quarter fiscal 2025 adjusted earnings per share of 39 cents, which missed the Zacks Consensus Estimate by 9.3% and declined sequentially from 47 cents. Over the past four quarters, the company beat the consensus estimate for earnings just once. Total investment income of $220.7 million missed the consensus mark by 2.5%. The figure also fell sequentially from $224.4 million.
Ares Capital’s fourth-quarter 2024 core earnings of 55 cents per share missed the Zacks Consensus Estimate of 58 cents due to an increase in expenses. However, an improvement in the total investment income and the company’s robust portfolio activities supported the results to some extent.
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