Lincoln Financial Group’s first quarter results prompted a modestly negative market reaction, as investors weighed solid adjusted earnings against a notable miss on operating income versus Wall Street expectations. Management pointed to steady progress in diversifying the business mix, particularly with margin expansion in Group Protection and strong annuity sales, but acknowledged ongoing market volatility and the impact of lower alternative investment returns. CEO Ellen Cooper described the quarter as “another solid quarter” and emphasized the company’s focus on operational efficiency and capital strength in light of continued macroeconomic uncertainty.
Is now the time to buy LNC? Find out in our full research report (it’s free).
Lincoln Financial Group (LNC) Q1 CY2025 Highlights:
- Revenue: $4.69 billion vs analyst estimates of $4.68 billion (2.2% year-on-year growth, in line)
- Adjusted EPS: $1.60 vs analyst estimates of $1.52 (5% beat)
- Adjusted Operating Income: $362 million vs analyst estimates of $453 million (7.7% margin, 20.1% miss)
- Market Capitalization: $5.85 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Lincoln Financial Group’s Q1 Earnings Call
- Ryan Krueger (KBW): asked about the drivers behind expected free cash flow improvement from the Bain Capital partnership. CFO Chris Neczypor clarified that accretion is expected from deploying new capital into spread-based earnings, not from share repurchases.
- Suneet Kamath (Jefferies): questioned the rationale for issuing new equity to Bain given Lincoln’s strong capital position. Neczypor explained that aligning interests and enabling accelerated growth in targeted products made a direct equity investment preferable to open-market purchases.
- Wes Carmichael (Autonomous Research): sought clarity on RBC ratio sensitivity to market volatility. Neczypor stated that the current capital disclosure reflects normal timing differences and emphasized the importance of maintaining a capital buffer against economic downturns.
- Tom Gallagher (Evercore ISI): asked for details on improved mortality in the Life segment and the sustainability of recent expense reductions. Neczypor confirmed that lower claims and expense discipline contributed to better results, and that cost savings should persist.
- Alex Scott (Barclays): inquired about competitive pressures in annuities and future product launches tied to the Bain partnership. CEO Ellen Cooper highlighted Lincoln’s focus on profitable growth via unique product features and noted plans to explore additional private fund and adjacent product opportunities.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace and impact of capital deployment from the Bain Capital partnership on spread-based product growth, (2) continued margin expansion and growth in Group Protection and Annuities, and (3) the development and launch of new products or fund offerings with strategic partners. We will also monitor how Lincoln navigates market volatility and whether cost-control measures are sustained.
Lincoln Financial Group currently trades at $34.28, in line with $33.99 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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