Globe Life Inc. (GL) Earnings & Analysis

Latest quarter

Globe Life reported third-quarter revenue of $1.6 billion, up from $1.5 billion a year earlier. Revenue was −0.03% against the consensus, while adjusted earnings of $4.84 per share missed the $4.87 consensus estimate.

Co-CEO Frank Svoboda said total premium revenue grew 7% from a year earlier. Life premium revenue rose 2% to $865 million, while health premium revenue grew 16% to $447 million. He attributed health premium growth to Medicare Supplement rate increases and sales at United American and Family Heritage.

Globe Life reported diluted earnings per share of $4.62, down from $4.73 a year earlier. Its gross margin was 45.6%, compared with 48.8%, and its operating margin was 30.0%, compared with 33.9%. Svoboda said life underwriting margin fell primarily because of fluctuations in annual assumption updates. CFO Thomas Kalmbach said the company repurchased $185 million of shares during the quarter.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Co-CEO James Matthew Darden said United American’s health underwriting margin turned negative in the third quarter. A Medicare claims-processing delay resulted in nearly $7 million of excess claims paid in the quarter that related to earlier periods, while high-severity claims contributed to an underwriting loss of nearly $16 million at the developing Evry group health business. Darden said the company was taking steps to improve margins, including pricing adjustments.

In the question-and-answer session, CFO Thomas Kalmbach said the company was considering rate increases for renewals and new business at Evry. He said the health margin range for 2027 allowed for additional volatility and that losses remained possible. Darden said the company had reviewed underwriting standards and pricing and brought in external expertise to validate some assumptions.

Darden said Medicare Supplement sales at United American benefited from people turning 65, beneficiaries moving from Medicare Advantage, and rate increases. At American Income, he said higher agent productivity offset a decline in agent count, leaving quarterly net life sales flat. He said further compensation changes were planned to support recruiting, retention and sales.

For Direct to Consumer, Darden said changes in digital advertising, including AI-powered search, had affected sales. He said inquiry rates improved in the latter part of the quarter as the division used initiatives including AI-enabled advertising.

Svoboda said Globe Life invested $833 million in fixed maturities during the quarter at an average yield of 6.4%. Kalmbach said the company planned to request a dividend from its Bermuda subsidiary in the fourth quarter, subject to regulatory approval. He said the dividend was included in the 2027 parent excess cash flow estimate, but not in the 2026 estimate.

Guidance

Kalmbach said Globe Life lowered its 2026 net operating earnings estimate to $15.35 to $15.65 per diluted share, citing third-quarter results and revised fourth-quarter United American margin estimates. On its first-quarter call, the company had estimated $15.40 to $15.90.

Svoboda said Globe Life now expects 2026 total premium revenue growth of around 6.5% and life premium growth of 2.5% to 2.75%; its first-quarter outlook was approximately 7% and 3% to 3.5%, respectively. Kalmbach said the company expects 2026 share repurchases of $725 million to $775 million, compared with its first-quarter estimate of $560 million to $610 million.