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Principal Financial (PFG) Q3 Earnings Miss, Dividend Up
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Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2017 operating net income of $1.28 per share missed the Zacks Consensus Estimate by 0.8%. However, the bottom line improved 11.3% year over year.
The company’s investment performance and net cash flows remained strong. Growth in operating earnings across all businesses was above market average. The company also displayed a balanced approach to capital management.
Including net realized capital gains of $1.48 per share, net income came in at $2.76 per share and more than doubled year over year.
Behind the Headlines
Operating revenues rallied 39.3% year over year to $3.9 billion. This improvement was driven by higher premiums and other considerations besides fees and other revenues.
Total expenses climbed 41.8% year over year to $3.5 billion, primarily due to increase in benefits, claims and settlement expense.
Principal Financial’s Asset Under Management (AUM) as of Sep 30, 2017 was a record $655.5 billion, up 10% year over year.
As of Sep 30, 2017, book value per share (excluding AOCI other than foreign currency translation adjustment) was $38.14, up 11.9% year over year.
Segment Update
Retirement and Income Solution: Revenues nearly doubled year over year to about $2.4 billion.
Operating earnings improved 1.5% year over year to $210.1 million.
Principal Global Investors: Revenues of $367.5 million improved nearly 6.2% from the prior-year quarter.
Operating earnings increased 15.3% year over year to $130.2 million.
Principal International: Revenues declined 17.8% year over year to $274.7 million in the quarter.
Operating earnings improved 11.9% year over year to $79.2 million.
U.S. Insurance Solution: Revenues increased 8.2% year over year to $985.5 million.
Operating earnings of $83.2 million were up 18.5% year over year.
Corporate: Revenues of ($20.3) million compared favorably with ($21) million in the year-ago quarter.
Operating loss of $43 million was narrower than a loss of $57.8 million in the year-ago quarter.
Dividend and Share Repurchase Update
The company paid $135.8 million in dividends and deployed $48.6 million to buy back 0.6 million shares in the third quarter. Total capital utilized was $190.5 million.
The board of directors of Principal Financial announced a dividend of 49 cents per share for the fourth quarter, a 4.2% increase over prior payout. This marks the seventh straight quarterly increase.
Principal Financial targets 2017 capital deployment of $800 million to $1.1 billion.
Last quarter, the bottom lines at both Ameriprise Financial, Inc. (AMP - Free Report) and Legg Mason, Inc. beat the respective Zacks Consensus Estimate, while that of AllianceBernstein Holding L.P. (AB - Free Report) missed the consensus mark.
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Principal Financial (PFG) Q3 Earnings Miss, Dividend Up
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2017 operating net income of $1.28 per share missed the Zacks Consensus Estimate by 0.8%. However, the bottom line improved 11.3% year over year.
The company’s investment performance and net cash flows remained strong. Growth in operating earnings across all businesses was above market average. The company also displayed a balanced approach to capital management.
Including net realized capital gains of $1.48 per share, net income came in at $2.76 per share and more than doubled year over year.
Behind the Headlines
Operating revenues rallied 39.3% year over year to $3.9 billion. This improvement was driven by higher premiums and other considerations besides fees and other revenues.
Total expenses climbed 41.8% year over year to $3.5 billion, primarily due to increase in benefits, claims and settlement expense.
Principal Financial’s Asset Under Management (AUM) as of Sep 30, 2017 was a record $655.5 billion, up 10% year over year.
As of Sep 30, 2017, book value per share (excluding AOCI other than foreign currency translation adjustment) was $38.14, up 11.9% year over year.
Segment Update
Retirement and Income Solution: Revenues nearly doubled year over year to about $2.4 billion.
Operating earnings improved 1.5% year over year to $210.1 million.
Principal Global Investors: Revenues of $367.5 million improved nearly 6.2% from the prior-year quarter.
Operating earnings increased 15.3% year over year to $130.2 million.
Principal International: Revenues declined 17.8% year over year to $274.7 million in the quarter.
Operating earnings improved 11.9% year over year to $79.2 million.
U.S. Insurance Solution: Revenues increased 8.2% year over year to $985.5 million.
Operating earnings of $83.2 million were up 18.5% year over year.
Corporate: Revenues of ($20.3) million compared favorably with ($21) million in the year-ago quarter.
Operating loss of $43 million was narrower than a loss of $57.8 million in the year-ago quarter.
Dividend and Share Repurchase Update
The company paid $135.8 million in dividends and deployed $48.6 million to buy back 0.6 million shares in the third quarter. Total capital utilized was $190.5 million.
The board of directors of Principal Financial announced a dividend of 49 cents per share for the fourth quarter, a 4.2% increase over prior payout. This marks the seventh straight quarterly increase.
Principal Financial targets 2017 capital deployment of $800 million to $1.1 billion.
Zacks Rank
Principal Financial presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Managers
Last quarter, the bottom lines at both Ameriprise Financial, Inc. (AMP - Free Report) and Legg Mason, Inc. beat the respective Zacks Consensus Estimate, while that of AllianceBernstein Holding L.P. (AB - Free Report) missed the consensus mark.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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