Unum reports lower than expected quarterly earnings

Unum Group, which employs about 3,000 workers in Maine, reported lower than expected earnings for the first quarter of 2012 because of weakness in its business in the United Kingdom and for policies that are no longer being marketed, such as long-term care and individual disability.

The Chattanooga, Tenn.-based company, which sells disability, life, dental and other insurance, said net income totaled $213.9 million, 73 cents a share, down from $223.6 million, 71 cents a share, a year ago.

Revenue rose to $2.61 billion, up from $2.56 billion a year ago.

In the U.S., Unum’s operating income increased 5.8 percent, to $205.9 million. Unum said it has had some price competition in certain markets, and a slight increase in premium income with higher employment and wage increases. In its U.K. business, operating income dropped 20.7 percent, to $38.8 million.

“While we are never content with falling short of expectations, the fundamental outlook for our business remains unchanged,” said Chief Executive Tom Watjen in a letter to employees. “We are beginning to see some better signs of top-line growth in many of our business lines, which is encouraging, but we will remain disciplined to ensure that we aren’t sacrificing profit margin in the process.”

For the full year, Unum expects growth in its operating income per share to be at the low-end of the range of 6 percent to 12 percent.

Unum’s board approved a 23.8 percent increase in the quarterly dividend. The higher payout of 13 cents a share will be effective with the dividend expected to paid in the third quarter, the company said.

The company repurchased $175 million worth of its stock in the first quarter.

 

Dow sees its highest close in more than four years

The fastest growth in U.S. manufacturing in 10 months gave stocks a lift Tuesday and pushed the Dow Jones industrial average to its highest close in more than four years.

Manufacturing expanded last month at the strongest pace since June, according to the Institute for Supply Management. Orders, hiring and production all rose.

A measure of manufacturing employment also reached a nine-month high, a hopeful sign ahead of Friday’s monthly jobs report.

The manufacturing news jolted stock indexes out of a morning stupor, although the gains waned throughout the afternoon. The Dow added 65.69 points to 13,279.32, its highest closing mark since Dec. 28, 2007, during the first month of the Great Recession.

“It definitely changed the direction of markets,” said Jack Ablin, chief investment officer at Harris Private Bank.

Treasury prices fell, and benchmark crude oil rose $1.29 to settle at $106.16 per barrel. Both of those things tend to happen when investors expect stronger economic growth.

Other indexes pushed higher. The Standard & Poor’s 500 index rose eight points to 1,406. The Nasdaq composite climbed four points to 3,050.