Unum Group 1Q earnings fall 9 percent on investment losses

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April 30, 2008

CHATTANOOGA, Tenn.—Unum Group, a provider of group disability insurance, said Wednesday its first-quarter earnings fell 9 percent due to a sharp rise in net investment losses.

Net income fell to $163.1 million, or 46 cents per share, from $178.3 million, or 51 cents per share, during the same period the previous year.

Total revenue at Unum Group fell to $2.54 billion from $2.6 billion during the same quarter in 2007.

Analysts polled by Thomson Financial, on average, forecast earnings of 57 cents per share for the quarter on revenue of $2.65 billion.

During the quarter, Unum Group took an after-tax loss on investments of $44.7 million, or 13 cents per share. Net investment losses totaled only $3.2 million, or 1 cent per share, during the year-ago period.

Removing the investment loss, operating earnings were $207.8 million, or 59 cents per share.

Operating income in the U.S. segment increased 14 percent to $162.7 million compared with $142.4 million during the same quarter last year. Operating income growth in the segment was tied to improving risk trends during the quarter and declining benefit ratios.

Operating income in the British segment increased 16 percent to $87.1 million due to lower claims rates as well as improved recoveries in the group long-term disability portion of the business.

Shares of Unum Group fell 47 cents Wednesday to close at $23.21.