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Why Is Voya (VOYA) Up 18.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have added about 18.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Voya due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Voya Financial Q3 Earnings & Revenues Miss Estimates
Voya Financial, Inc.’s third-quarter 2020 net operating income of $1.19 per share missed the Zacks Consensus Estimate by 15.6%. Moreover, the bottom line declined 12.5% year over year. The results reflect poor performance in Retirement and Employee Benefits segments, offset by decent performance in Investment Management.
Total revenues declined 31.6% year over year to $128 million. Moreover, the top line missed the Zacks Consensus Estimate of $242 million by 47.1%.
Net investment income increased 16.4% to $800 million in the quarter. Fee income increased 2.6% year over year to $507 million. Premiums rose 6.9% to $604 million.
Total benefits and expenses increased 28.4% year over year to $2.2 billion, due to higher operating expenses, net amortization of DAC/VOBA and interest credited and other benefits to contract owners/policyholders. Assets under management and administration were $657 billion as of Sep 30, 2020.
Segmental Update
Retirement’s adjusted operating earnings of $25 million decreased 78.6% year over year due to unfavorable DAC/VOBA and other intangibles, lower bank sweep revenues and credited hardship distribution and loan fees. This was offset by fall in administrative expenses.
Investment Management posted adjusted operating earnings of $47 million, up 2.2% year over year due to higher investment capital revenues primarily due to higher private equity results in the current quarter. This was offset by higher administrative expenses and lower fee-based margin. It generated $1.8 billion of institutional net flows in the third quarter, which soared 445.2% year over year.
Employee Benefits’ adjusted operating earnings were $56 million, down 1.7% year over year due to higher administrative expenses. This was offset by improved underwriting results and higher investment income.
Corporate incurred adjusted operating losses of $88 million, narrower than the year-ago quarterly loss of $98 million, owing to lower administrative expenses.
Financial Update
As of Sep 30, 2020, cash and cash equivalents were $1 billion, down 8.9% year over year. As of Sep 30, 2020, total investments were $56.1 billion, up 3.5% year over year. At the third-quarter end, long-term debt was $3 billion, up 0.03% from 2019 end. Adjusted debt to capital deteriorated 330 basis points to 33.7% from 2019 end. As of Sep 30, 2020, book value per share (excluding AOCI) was $36.15, down 12.5% from 2019 end. Voya Financial exited the third quarter with $642 million in excess capital. Estimated combined RBC ratio was 455% as on Sep 30, 2020.
Dividend Update
Last month, the company approved a quarterly dividend of 15 cents per share. The dividend will be paid out on Dec 28, 2020, to shareholders on record as of Nov 30.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Voya has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Voya (VOYA) Up 18.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have added about 18.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Voya due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Voya Financial Q3 Earnings & Revenues Miss Estimates
Voya Financial, Inc.’s third-quarter 2020 net operating income of $1.19 per share missed the Zacks Consensus Estimate by 15.6%. Moreover, the bottom line declined 12.5% year over year. The results reflect poor performance in Retirement and Employee Benefits segments, offset by decent performance in Investment Management.
Total revenues declined 31.6% year over year to $128 million. Moreover, the top line missed the Zacks Consensus Estimate of $242 million by 47.1%.
Net investment income increased 16.4% to $800 million in the quarter. Fee income increased 2.6% year over year to $507 million. Premiums rose 6.9% to $604 million.
Total benefits and expenses increased 28.4% year over year to $2.2 billion, due to higher operating expenses, net amortization of DAC/VOBA and interest credited and other benefits to contract owners/policyholders. Assets under management and administration were $657 billion as of Sep 30, 2020.
Segmental Update
Retirement’s adjusted operating earnings of $25 million decreased 78.6% year over year due to unfavorable DAC/VOBA and other intangibles, lower bank sweep revenues and credited hardship distribution and loan fees. This was offset by fall in administrative expenses.
Investment Management posted adjusted operating earnings of $47 million, up 2.2% year over year due to higher investment capital revenues primarily due to higher private equity results in the current quarter. This was offset by higher administrative expenses and lower fee-based margin. It generated $1.8 billion of institutional net flows in the third quarter, which soared 445.2% year over year.
Employee Benefits’ adjusted operating earnings were $56 million, down 1.7% year over year due to higher administrative expenses. This was offset by improved underwriting results and higher investment income.
Corporate incurred adjusted operating losses of $88 million, narrower than the year-ago quarterly loss of $98 million, owing to lower administrative expenses.
Financial Update
As of Sep 30, 2020, cash and cash equivalents were $1 billion, down 8.9% year over year. As of Sep 30, 2020, total investments were $56.1 billion, up 3.5% year over year. At the third-quarter end, long-term debt was $3 billion, up 0.03% from 2019 end. Adjusted debt to capital deteriorated 330 basis points to 33.7% from 2019 end. As of Sep 30, 2020, book value per share (excluding AOCI) was $36.15, down 12.5% from 2019 end. Voya Financial exited the third quarter with $642 million in excess capital. Estimated combined RBC ratio was 455% as on Sep 30, 2020.
Dividend Update
Last month, the company approved a quarterly dividend of 15 cents per share. The dividend will be paid out on Dec 28, 2020, to shareholders on record as of Nov 30.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, Voya has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.