CNO Financial Lifts Guidance as Operating EPS Surges 45%
CNO Financial Group posted second-quarter operating earnings of $1.26 a share, up 45% from a year earlier, and raised its full-year outlook for the first time this year.
CNO Financial Group (CNO) reported second-quarter operating earnings per share of $1.26, up 45% from $0.87 a year earlier. Net income rose 37% to $126 million from $91.8 million.
The growth marks an acceleration from earlier in the year. Operating EPS climbed 33% in the first quarter to $1.05 and 11% in the fourth quarter of 2024 to $1.47, putting year-to-date 2025 operating EPS up 39%. First-quarter net income of $38 million had risen 75% year over year but trailed operating income by a wide margin, a gap the company attributed to swings in non-operating items. No significant items affected net operating income in either quarter this year, a break from 2024, when such items subtracted $32.2 million in the third quarter and $5.3 million in the first.
Operating return on equity excluding significant items reached 13.1% in the second quarter, up from 12.2% in the first quarter and 11.4% for full-year 2024, the third straight quarterly improvement. Book value per diluted share excluding accumulated other comprehensive income rose $1.11 sequentially to $39.92, a larger jump than the $0.17 increase recorded in the prior quarter. GAAP return on equity on a trailing four-quarter basis told a different story, falling to 10.9% from 11.9% a year earlier, even as the operating measure moved the other direction.
Sales growth slowed even as profitability improved. Total new annualized premiums rose 7% year over year in the second quarter, down from 11% growth in the first quarter and a 15% pace for all of 2024. The company's streak of consecutive quarters with sales growth extended to 16, from 15 in the first quarter.
CNO raised its full-year 2025 operating EPS guidance by 8% at the midpoint, the first such increase disclosed across the quarters reviewed; neither the first-quarter nor fourth-quarter releases had flagged a guidance change.
Spending on technology modernization climbed sharply, with TechMod expense reaching $9.7 million in the quarter versus $3.2 million a year earlier, and $13.7 million in the first quarter versus zero in the year-ago period. Trailing four-quarter TechMod expense hit $40.5 million, up from $3.2 million a year earlier. The non-operating reconciliation also picked up a new $101.9 million goodwill and asset impairment on a trailing four-quarter basis, along with a $20.3 million net loss tied to the previously announced exit from Worksite fee services, which the company began excluding from operating income starting in the fourth quarter of 2024.
CNO's debt-to-capital ratio ticked up to 34.0% from 33.6% at year-end 2024, while investment borrowings rose $500 million to $2,941.7 million as of June 2025. Unrestricted holding-company cash and investments fell to $233.2 million from $351.4 million at year-end, a roughly 34% decline over two quarters, even as the company repurchased $60 million of stock in the quarter, or 1.3 million shares at an average price of $46.57.
The company disclosed an estimated statutory risk-based capital ratio of 377% as of quarter-end, alongside $35.4 million of estimated statutory operating gain and $20.0 million of dividends paid from subsidiaries to the holding company.