Unum Group on Wednesday announced that operating earnings increased 23 percent for the second quarter of 2008 as the insurer continued its trend of outperforming Wall Street estimates.

“I am very pleased with our results in the second quarter and first half of the year, especially the steady, consistent performance we have seen throughout the company,” said Thomas R. Watjen, Unum president and chief executive. “On an operating level, all of our businesses continued to perform well, and we maintained our strong investment performance and financial flexibility despite the continued challenging financial markets.”

Staff Photo by Dan Henry
Unum Group of Chattanooga posted a strong increase in operating earnings in its second quarter.

The Chattanooga-based company, which employs about 2,800 workers locally, announced operating income of $223.2 million or 65 cents per diluted common share for the quarter ending June 30. For the same time last year, earnings were $181.5 million or 51 cents per diluted common share.

The consensus analyst estimate was that Unum would earn 60 cents per share in the latest quarter.

Bruce Cox, a financial analyst with Chicago-based Fitch Ratings, said Unum appears to be on track.

“It looks like they had a pretty solid quarter,” Mr. Cox said. “They are going in the right direction.”

Mr. Cox said Unum has positive contributions from each of its three major divisions.

Unum US is the Chattanooga-based provider of disability, group life and long-term care insurance and voluntary workplace benefits such as cancer and accident insurance; Colonial Life & Accident, based in Columbia, S.C., is a national supplier of voluntary workplace products; and Unum UK, headquartered in Dorking, England, sells group disability and group critical illness insurance.

Unum spokesman Jim Sabourin attributed the company’s success to its employees.

“I know it sounds cliché, but you are talking about a company that just five short years ago was in a very different position, and employees really pulled together over that time period,” he said. “If it wasn’t for the performance of those employees, we wouldn’t be doing as well as we are today.”

Five years ago, UnumProvident Corp. stock plummeted from $19 to $6 a share after the company was accused of not paying legitimate claims, causing many to speculate that the company might not survive.

Mr. Watjen, who was chief operating officer at the time, became CEO after then-CEO Harold Chandler was ousted in 2003. Mr. Watjen then steered the company, which later became known as Unum Group, by implementing recovery plans and altering its risky high yield investments into more conservative ones.

“Looking ahead, while we expect these challenging times to continue, we believe there are opportunities to profitably grow our business while maintaining the risk management principals that have contributed to our past success,” Mr. Watjen said.

Unum’s stock closed Wednesday at $22.44 a share, up 31 cents from Tuesday’s close. During the past year, Unum’s stock has ranged from $19.22 to 26.67.

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