Earnings Analysis for LNC – Last 3 Years
Revenue Analysis:
Total and Operating Revenue: Over the past three years, LNC’s operating revenue varied significantly. In the most recent quarter of 2024, the operating revenue was $4,115 million, a substantial rise compared to $720 million in 2023-12-31, and similar to $4,228 million in 2023-09-30. This fluctuation suggests a volatile revenue stream, with particular challenges faced in the latter part of 2023.
Cost Management:
Total Expenses: The total expenses correlate closely with the revenue changes. For the quarter ending 2024-03-31, the total expenses were $2,587 million, which was significantly higher than revenues in December 2023 ($2,334 million), indicating some cost control relative to revenue increase. The comparative stability in expenses suggests improved efficiency or cost reduction strategies being effectively implemented in the latest periods.
Profitability Analysis:
EBIT and Net Income: LNC’s EBIT was $1,609 million in the latest quarter, recovering from a deep trough of -$1,533 million at the end of 2023. Net Income has similarly fluctuated, with $1,222 million for 2024-03-31 contrasting sharply with losses in previous quarters (e.g., -$1,235 million at the end of 2023). These improvements are critical indicators of possible operational recovery and better profitability.
Cash Flow Indicators:
Interest Expense: Interest expenses remain consistent at around $81 million to $84 million through all observed periods, indicating stable financing costs despite fluctuating revenue and earnings.
Taxation:
Tax Rate and Provisions: The effective tax rate for LNC varied, with 20.03% for Q1 2024 and significantly higher negative rates in the loss periods (e.g., -23.48% in December 2023). Tax provisions were positive in profitable quarters and negative when losses were reported, reflecting the impact of taxable income conditions.
Shareholder Metrics:
Earnings per Share (EPS): Both diluted and basic EPS show recoveries in the latest quarter (6.93 and 6.98 respectively) from severe negatives in the previous year (-7.35 and -7.34 in December 2023). This rebound is essential for shareholder confidence.
Average Shares: The number of shares used for calculations showed little variation, maintaining around 170 million shares, which suggests a stable equity base without significant dilution or buybacks.
Conclusion:
LNC has experienced a significant financial recovery as evidenced in the latest quarter of 2024 after a challenging period in 2023. Revenue has returned to earlier higher levels, expenses have been better managed relative to revenues, and profitability has seen a noteworthy turnaround. Shareholders should be encouraged by the return to profitability, though the previous volatility suggests that cautious optimism is advised, with a close watch on future revenue consistency and cost management strategies.
Appendices:
Data tables and detailed quarterly calculations are available upon request for more granular analysis and understanding of LNC’s financial performance over the specified period.