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PRIMERICA'S THIRD QUARTER OPERATING EARNINGS PER SHARE UP 60 PERCENT TO $0.96; SMITH BARNEY SHEARSON RECORDS EARNINGS OF $118.8 MILLION

 NEW YORK, Oct. 18 /PRNewswire/ -- Primerica Corporation (NYSE: PA) today reported that operating earnings per share for the quarter ended Sept. 30, 1993 reached $0.96, up 60 percent from $0.60 in the prior year period. Operating earnings were $242.2 million versus $136.8 million, an increase of 77 percent.
 Net income was $258.7 million, or $1.03 per share, compared with $165.1 million, or $0.73 per share, in the 1992 period. Net income in the current year quarter includes, in addition to operating earnings:
 -- $85.2 million in reported investment portfolio gains and
 $4.4 million from the sale of subsidiaries and affiliates
 -- A $65.0 million provision for one-time expenses related to the
 merger of Smith Barney with the retail brokerage and asset
 management businesses of Shearson Lehman Brothers
 -- A net charge of $8.1 million representing the cumulative effect,
 through June 30, 1993, of the recently enacted tax increase (see
 tables).
 Net income for the 1992 period included, in addition to operating earnings, $28.3 million, or $0.13 per share, in reported investment portfolio gains.
 These results are based on average common shares outstanding of 244.3 million and 220.7 million, respectively, in the 1993 and 1992 third quarters, reflecting the two stock splits that have occurred in 1993 which are equivalent to a two-for-one split.
 Recent Events
 Sanford I. Weill, chairman and chief executive officer, said, "Primerica's performance in the quarter was very gratifying and our accomplishments exciting. We officially launched Smith Barney Shearson beginning in August, and the firm's outstanding results just this far are, we believe, simply a harbinger of its long-term potential earning power. In addition, our advisory


role in prominent recent proposed merger transactions demonstrates the level of credibility already achieved by our strengthened investment banking effort.
 "Primerica's financial strength also enabled us to announce in September our agreement to acquire for stock the remaining 73 percent of The Travelers Corporation we don't already own," said Weill. "We were particularly pleased that the proposed transaction was well-received by the major credit rating agencies, who affirmed the ratings of both companies and gave indications of potential for upgrades in the future. Travelers' operating performance has been improving over the past year, as has the outlook for real estate, which enhances our belief that the combined company will be markedly stronger together than either alone."
 Weill added, "Given these exciting recent events, the solid performances generated thus far this year by all our businesses, and the strength of our balance sheet, we are decidedly optimistic about Primerica's future."
 Nine Months 1993 and 1992
 For the first nine months of 1993, operating earnings were $607.9 million, or $2.50 per share, versus $439.7 million, or $1.96 per share, in the prior year period. Net income for the 1993 period was $635.4 million, or $2.62 per share, which includes, in addition to operating earnings, reported investment portfolio gains of $109.2 million; the $65.0 million provision for the Smith Barney Shearson merger; a net charge of $8.1 million related to the higher corporate tax rate; an $8.1 million gain from the sale of subsidiaries and affiliates; and a $16.7 million charge related to FAS 106.
 This compares with net income for the 1992 nine months of $506.8 million, or $2.26 per share, which includes, in addition to operating earnings, reported investment portfolio gains of $28.3 million; net gains of $66.9 million from subsidiary and affiliate sales; and a $28.1 million charge related to FAS 109.
 Investment Services
 Smith Barney Shearson earned $118.8 million in the third quarter, which includes two months' results from Shearson following its acquisition on July 31, 1993. This compares with $30.1 million reported by Smith Barney alone in the prior year's quarter.
 When compared with Smith Barney's performance last year, the merged firm recorded almost a 250 percent increase in commission revenues, a five-fold rise in asset management fees, almost triple the amount of revenues from principal trading and net interest income, and a doubling of investment banking revenues. This contributed to a pretax profit margin for the firm of 21 percent.
 These results exclude a $65.0 million after-tax provision in the quarter for one-time expenses related to the Smith Barney Shearson combination.
 The Mutual Funds and Asset Management sector earned $8.0 million in the quarter, up from $7.3 million in the 1992 period. These results reflect increases in assets under management of 18 percent at American Capital and 7 percent at RCM Capital Management. Mutual fund sales at American Capital rose 40 percent from the prior year period.
 With the addition of Shearson and continued growth in Primerica's asset management sector overall, the company now ranks among the country's top 10 managers of third-party assets, with almost $115 billion under management.
 Consumer Finance Services
 Earnings from Consumer Finance reached $54.0 million, up 8 percent, driven by a substantial year-over-year decline in losses and a 4.5 percent increase in receivables outstanding. Charge-offs continued to decline, for the sixth consecutive quarter, to 2.25 percent of average receivables, down from 2.82 percent in the year-ago period and 2.34 percent in the second quarter of 1993. Delinquencies were 2.21 percent, down from 2.51 percent in the year-ago third quarter.
 Net receivables outstanding were $6.05 billion, up from $5.89 billion at June 30, 1993. Branch offices numbered 746 at quarter- end, with approximately 25 new offices scheduled to be opened before year-end 1993.
 These operating results for the Consumer Finance Services segment exclude reported investment portfolio gains of $22.7 million and $4.3 million in the 1993 and 1992 quarters, respectively.
 Insurance Services
 Earnings from Primerica Financial Services were $44.2 million, down slightly from $45.2 million in last year's period. Sales of individual term life insurance of $12.0 billion were up from $11.1 billion for the comparable 1992 quarter, with total life insurance in force reaching $305.8 billion at quarter-end. This represents the third consecutive quarter of increasing in-force levels, reflecting on-going improvement in policy persistency.
 Mutual fund sales (at net asset value) by the PFS sales force rose 29 percent in the quarter to $306.7 million, with total assets under management in the Common Sense(R) Trust family of funds reaching $3.3 billion. Net receivables outstanding of loan products marketed by PFS continued to rise, reaching $690.4 million at quarter-end, up 47 percent from year-ago levels. Customer satisfaction with the variable rate second mortgage product introduced early this year continues to be strong.
 These operating results for PFS exclude reported investment portfolio gains of $45.3 million and $9.9 million in the 1993 and 1992 quarters, respectively.
 Transport Life Insurance Company (formerly reported with Voyager as part of Specialty Life and Health) earned $6.5 million in the quarter versus $7.3 million in the prior year period, which included two employee benefits businesses that have since been sold to The Travelers. (Contributions to earnings from the Voyager group of companies, sold in May 1993, are reflected in the "Corporate and Other" segment.)
 Transport's results exclude reported investment portfolio gains of $7.7 million and $5.9 million in the 1993 and 1992 quarters, respectively.
 The Gulf Insurance Group earned $7.3 million in the quarter, before The Travelers' 50 percent minority interest, compared to $5.8 million in the 1992 period, which included a $2.0 million charge related to Hurricane Andrew. Gulf's combined ratio continued to improve year-over-year to 94.9 percent versus 101.2 percent.
 These operating results for Gulf exclude reported investment portfolio gains of $6.2 million and $6.0 million in the 1993 and 1992 quarters, respectively.
 Corporate and Other
 The Corporate and Other segment contributed $24.1 million of income in the 1993 quarter compared to a net expense of $6.7 million in the 1992 period. Corporate expenses rose to $17.4 million from $11.3 million last year as a result of lower income from miscellaneous investments and higher interest costs related to financing acquisitions, offset by lower borrowing costs. These are net of contributions from retained lines of Voyager business of $1.9 million and $2.4 million, respectively, in the 1993 and 1992 quarters. Net expenses exclude reported investment portfolio gains of $3.3 million and $2.2 million in the 1993 and 1992 quarters, respectively.
 The 27 percent Travelers investment contributed $24.5 million to Primerica's operating earnings in the current quarter, and the company's share of Travelers' reported investment portfolio gains was $3.1 million. As announced, there was no impact to Primerica's earnings from Travelers' addition of $325 million to its property-casualty reserves which resulted in its taking a $211 million after-tax charge to earnings in the quarter. For the 1992 period, Fingerhut contributed $2.4 million in earnings.
 Primerica Corporation is a diversified financial services company principally engaged in investment banking and securities brokerage, mutual funds and asset management, consumer lending, and life, credit, accident & health and property & casualty insurance. As of Sept. 30, 1993, Primerica had assets of approximately $48 billion and book value of approximately $20.75 per common share.
 PRIMERICA CORPORATION
 Summary Of Earnings
 (In millions of dollars and shares,
 except per share amounts)
 Period ended Three months Nine months
 Sept. 30 1993 1992 1993 1992
 Revenues $2,015.7 $1,245.6 $4,601.6 $3,856.0
 Income from operations
 before income taxes
 and minority interests $ 440.0 $ 251.4 $1,064.4 $ 727.7
 Provision for income
 taxes on operations (179.0) (86.3) (401.5) (259.7)
 Income from operations
 bef. minority interests 261.0 165.1 662.9 468.0
 Minority interests,
 net of income taxes (6.7) --- (18.9) ---
 Income from operations 254.3 165.1 644.0 468.0
 Gains on sales of stock
 of subsidiaries and
 affiliates, net of
 income taxes 4.4 --- 8.1 66.9
 Income before cumulative
 effect of changes in
 accounting principle 258.7 165.1 652.1 534.9
 Cumulative effect of
 change in accounting
 for postretirement
 benefits other than
 pensions, net of tax --- --- (16.7) ---
 Cumulative effect of
 change in accounting
 for income taxes --- --- --- (28.1)
 Net Income 258.7 165.1 635.4 506.8
 Preferred dividends (7.2) (4.2) (19.4) (4.2)
 Income applicable
 to common stock $ 251.5 $ 160.9 $ 616.0 $ 502.6
 Earnings per share
 Before cumulative
 effect of changes in
 accounting principle $ 1.03 $ .73 $ 2.69 $ 2.39
 Cumulative effect of changes in
 accounting principle --- --- (.07) (.13)
 Total $ 1.03 $ .73 $ 2.62 $ 2.26
 Total average common
 and equivalent shares 244.3 220.7 235.4 222.2
 Net Income Summary
 (In millions of dollars)
 Period ended Three months Nine months
 Sept. 30, 1993 1992 1993 1992
 Income summary, net of
 minority interest in 1993
 Operating earnings $ 242.2 $ 136.8 $ 607.9 $ 439.7
 Provision for merger
 related costs (65.0) --- (65.0) ---
 Reported portfolio gains 85.2 28.3 109.2 28.3
 Cumulative effect
 of tax rate change
 through June 30, 1993 (8.1) --- (8.1) ---
 Income from operations 254.3 165.1 644.0 468.0
 Gains on sales of
 stock of subsidiaries
 and affiliates 4.4 --- 8.1 66.9
 Income before cumulative
 effect of changes in
 accounting principle 258.7 165.1 652.1 534.9
 Cumulative effect of
 change in accounting
 for postretirement benefits
 other than pensions,
 net of tax --- --- (16.7) ---
 Cumulative effect of
 change in accounting
 for income taxes --- --- --- (28.1)
 Net income $ 258.7 $ 165.1 $ 635.4 $ 506.8
 -0- 10/18/93
 /CONTACT: Mary McDermott, 212-891-8870, or Barbara Yastine, 212-891-8872, both of Primerica Corporation/
 (PA)


CO: Primerica Corporation ST: New York IN: FIN SU: ERN

MP -- NY027 -- 3254 10/18/93 09:51 EDT
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Publication:PR Newswire
Date:Oct 18, 1993
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