National Western Life Group Inc Reports Substantial Earnings Growth in Q1 2024

GuruFocus Research

11 May 2024 at 5:32 am·3-min read

Consolidated Net Earnings: $73.6M for Q1 2024, a significant increase from $12.3M in Q1 2023.
Earnings Per Share: $20.82 per diluted share of Class A Common Stock in Q1 2024, up from $3.48 in Q1 2023.
Revenue: Reported at $197.6M, marking a 29% increase from $152.6M in the same quarter last year.
Net Investment Income: Rose to $96.0M in Q1 2024 from $87.0M in Q1 2023.
Book Value Per Share: Increased to $686.73 as of March 31, 2024, from $670.99 at the end of 2023.
Market Risk Benefits Liability Expense: Decreased to $16.4M in Q1 2024 compared to an increase of $37.0M in Q1 2023.
Life Insurance Sales: Face amount of life insurance sold rose by 24% in Q1 2024 compared to the previous year.

On May 9, 2024, National Western Life Group Inc (NASDAQ:NWLI) announced a remarkable increase in its first-quarter earnings for 2024, underscoring a significant financial upturn. The detailed financial outcomes were disclosed in the company's recent 8-K filing. NWLI, a prominent insurance provider offering products tailored for the savings, protection, and retirement needs of its policyholders, reported consolidated net earnings of $73.6 million, or $20.82 per diluted share, a substantial rise from $12.3 million, or $3.48 per diluted share in the same quarter the previous year.

National Western Life Group Inc Reports Substantial Earnings Growth in Q1 2024

Company Overview

National Western Life Group Inc operates through its subsidiaries, primarily offering life insurance and annuity products. With a diverse portfolio that includes universal life, whole life, and term insurance plans, the company caters to a broad customer base in the United States and internationally. The annuities segment, which contributes approximately half of NWLI's revenue, plays a crucial role in its financial ecosystem.

Financial Performance Highlights

The company's revenue for the quarter stood at $197.6 million, marking a 29% increase from $152.6 million in the first quarter of 2023. This growth was largely fueled by improved equity market performance, which augmented the realized and unrealized gains on derivative investments used to hedge the interest crediting rate mechanism on its fixed-index annuities and universal life products. Additionally, NWLI experienced a rise in net investment income, which climbed to $96.0 million from $87.0 million in the prior year's quarter.

Strategic Developments and Market Dynamics

Ross R. Moody, Chairman, President, and CEO of NWLI, commented on the favorable economic environment and its positive impact on the company's financial results. He noted, "The economic environment coupled with financial market performance was very conducive for us from a financial reporting standpoint." The company also saw a 24% increase in the face amount of life insurance sold compared to last year, indicating robust sales activity on the life insurance front.

Challenges and Forward Movements

Despite the positive earnings report, NWLI faces challenges, including the complexities surrounding its ongoing merger agreement with Prosperity Life Group. The merger's completion is contingent upon obtaining necessary approvals, which adds a layer of uncertainty to NWLI's future operations.

Financial Health and Investor Insights

As of March 31, 2024, NWLI maintained consolidated total assets of $12.1 billion and consolidated stockholders' equity of $2.5 billion. The company's strong financial position is further evidenced by its book value per share, which stood at $686.73, up from $670.99 at the end of 2023. These metrics are crucial for investors as they reflect the company's ability to generate value and sustain its financial health over time.

Conclusion

The first quarter of 2024 has been significantly positive for National Western Life Group Inc, marked by substantial growth in earnings and revenue. The company's strategic initiatives and favorable market conditions have contributed to this success, although the impending merger presents both opportunities and challenges. Investors and stakeholders will likely watch closely as NWLI navigates these dynamics in the upcoming quarters.

For detailed financial figures and further information, refer to the full earnings report by visiting NWLI's 8-K filing.

Explore the complete 8-K earnings release (here) from National Western Life Group Inc for further details.

This article first appeared on GuruFocus.

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