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SunAmerica Reports 38% Rise in Earnings

July 23, 1998|From Bloomberg News

SunAmerica Inc., an investment and insurance company that has been one of Wall Street's hottest financial stocks in recent years, said Wednesday that its fiscal third-quarter earnings rose 38% as sales more than doubled.

SunAmerica said earnings from operations in the quarter ended June 30 rose to $141.2 million, or 65 cents a diluted share, from $102.2 million, or 50 cents, in the year-earlier quarter.

The results, which excluded gains and losses from the sale of securities, beat the forecast of 61 cents a share from analysts surveyed by First Call Corp.

The Los Angeles-based company, which sells retirement plans, benefited from gains in financial markets that encouraged more Americans to save for retirement. Aging baby boomers nearing the end of their working lives are boosting sales of retirement products across the industry.

"SunAmerica performed extremely well," said Kevin Molloy, an analyst at Sands Brothers & Co. "They're keeping themselves very well positioned."

Shares of the company eased 25 cents to close at $63.06 in New York Stock Exchange composite trading. The stock has doubled over the last year.

SunAmerica said third-quarter sales more than doubled to a record $2.6 billion, from $1.1 billion in the year-earlier period. Sales of tax-deferred retirement plans, or annuities, rose to more than $1 billion, from $665 million.

Sales of variable annuity products--tax-deferred retirement savings plans based on mutual funds--increased to $981 million from $537 million a year earlier.

Sales of guaranteed investment contracts, which SunAmerica markets to institutional investors, more than quadrupled to $1.4 billion from $319 million a year earlier, the company said. Foreign sales accounted for much of the rise.

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