Conseco Inc. (CNO) offered its earnings guidance for full year 2010 on Tuesday. The company expects net operating income in the range of 55 to 65 cents a share in 2010. The estimated earnings per share are based on operating income between $145 million and $170 million.

The pre-tax operating income (loss) is projected to be in the range of $200 – $225 million for the company’s Bankers Life segment, $110 – $125 million for Insurance Group, $24 – $30 million for Colonial Penn and $(43) – $(47) million for Corporate segment. The expenses of about $6 million related to the previously announced merger of three of Conseco’s insurance subsidiaries are included in the Corporate segment projection.

Incorporated in 1979, Indianapolis-based Conseco is the top-tier holding company for a group of insurance companies operating throughout the United States. Conseco’s multiple distribution channels provide a broad reach across the market since consumers can access its products through an agent (Bankers Life or Conseco Insurance Group), without an agent (Colonial Penn), and at the worksite (Conseco Insurance Group).

With its broad reach, we think that the company will be able to significantly capture the market for middle-income families and seniors, which is underserved by a majority of financial service providers. We are concerned about the pricing challenges in the long-term care business and recent rating downgrades.

We also suspect that the company will continue to incur increasing losses on its investment portfolio. However, we expect increasing new business volume along with cost containment measures to support the bottom line to some extent.

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