EARNINGS : SunAmerica Turns In Record Performance
SunAmerica Inc. reported record quarterly earnings Monday in a performance that Chairman and Chief Executive Eli Broad attributed partly to an expanded sales force and a national advertising campaign, but also to increasing consumer concerns about retirement savings.
Los Angeles-based Sun, which sells fixed- and variable-rate annuity products, mainly for retirement accounts, logged net income of $48.3 million in the third fiscal quarter ended June 30, up 15% from the $42.1 million earned in last year’s comparable quarter.
Broad said in a telephone interview that the financial services company’s prospects are bright, considering that baby boomers now in middle age are doubtful that Social Security or rising home values are going to provide the kind of cushion they will need for retirement.
SunAmerica, which sells its products through a network of more than 20,000 licensed independent agents and brokers, has been expanding its in-house sales force recently. The company expects to double its force of financial planners from 5,000 today to 10,000 three years from now, Broad said.
Despite declining interest rates and slower fixed-rate annuity sales, SunAmerica’s total sales grew in the third quarter to $831 million, up 38% over the third quarter of 1994.
Net investment income during the latest quarter rose to $94.7 million, up 28% over a year ago. The spread between SunAmerica’s yield on its average invested assets and the average rate paid on its interest-bearing liabilities improved to 3.36%, up from 2.97% in the third quarter of 1994.
