It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? 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 catalysts.
Voya Financial Q1 Earnings, Revenues Miss Estimates
Voya Financial reported first-quarter 2023 adjusted operating earnings of $1.69 per share, which missed the Zacks Consensus Estimate by 1.7%. The bottom line however increased 15% year over year. Our estimate was $1.71.
The increase reflects the benefits of diverse revenue streams and strong margins across Voya’s businesses.
Behind the Headlines
Adjusted operating revenues amounted to $261 billion, which decreased 4.4% year over year. The top line also missed the Zacks Consensus Estimate by 9.4%. Our estimate was $274.1 million.
Net investment income declined 13.9% year over year to $545 million. Our estimate was $2519.2 million. Meanwhile, fee income of $464 million increased 7.2% year over year. Our estimate was $410.8 million. Premiums totaled $685 million, up 12.7% from the year-ago quarter. Our estimate was $836.2 million.
Total benefits and expenses were $1.7 billion, up 22.4% from the year-ago quarter. Our estimate was $1.3 billion.
As of Mar 31, 2023, Voya Financial’s assets under management, assets under administration and advisement totaled $771.2 million.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $132 million, which decreased 42.1% year over year, primarily due to lower alternative investment income. Full-service recurring deposits grew 9.6% to $13.6 billion.
Health Solutions adjusted operating earnings amounted to $94 million, which increased more than four-fold year over year due to strong sales growth, favorable underwriting results and the positive impact of the Benefitfocus acquisition, which closed in January 2023. Annualized in-force premiums and fees grew 22% to $3.3 billion. The strong increase reflects growth across all product lines and the positive impact of the Benefitfocus acquisition.
Investment Management posted adjusted operating earnings of $33 million, which plunged 15.4% year over year, due to higher expenses, reflecting timing and elevated seasonal impacts. Net outflows were $0.9 billion during the trailing 12 months ended Mar 31, 2023.
Corporate incurred an adjusted operating loss of $69 million, flat year over year.
Financial Update
Voya Financial exited the quarter with cash and cash equivalents of $724 million, which decreased 21.2% year over year. Total investments amounted to $38.7 billion, down 1% year over year.
Long-term debt at quarter-end was flat from 2022 end at $2.1 billion. The financial leverage ratio deteriorated 630 basis points year over year to 36.1%. As of Mar 31, 2023, book value per share (excluding AOCI) was $59.95, which increased 17.2% year over year.
Voya Financial exited the first quarter with more than $0.5 billion in excess capital.
Acquisition Update
On Jan 24, 2023, Voya completed the acquisition of Benefitfocus, Inc., an industry leader in benefits administration technology, which will help accelerate Voya’s workplace-centered strategy.
Capital Deployment
As of Mar 31, 2023, Voya Financial had $275 million remaining under its share-repurchase authorization effective through Sep 30, 2023. It expects to resume share repurchase activity in the second quarter of 2023 and plans to increase the common stock dividend to an annual yield of approximately 2% in the second half of 2023.
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 subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 has been net zero. 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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It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? 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 catalysts.
Voya Financial Q1 Earnings, Revenues Miss Estimates
Voya Financial reported first-quarter 2023 adjusted operating earnings of $1.69 per share, which missed the Zacks Consensus Estimate by 1.7%. The bottom line however increased 15% year over year. Our estimate was $1.71.
The increase reflects the benefits of diverse revenue streams and strong margins across Voya’s businesses.
Behind the Headlines
Adjusted operating revenues amounted to $261 billion, which decreased 4.4% year over year. The top line also missed the Zacks Consensus Estimate by 9.4%. Our estimate was $274.1 million.
Net investment income declined 13.9% year over year to $545 million. Our estimate was $2519.2 million. Meanwhile, fee income of $464 million increased 7.2% year over year. Our estimate was $410.8 million. Premiums totaled $685 million, up 12.7% from the year-ago quarter. Our estimate was $836.2 million.
Total benefits and expenses were $1.7 billion, up 22.4% from the year-ago quarter. Our estimate was $1.3 billion.
As of Mar 31, 2023, Voya Financial’s assets under management, assets under administration and advisement totaled $771.2 million.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $132 million, which decreased 42.1% year over year, primarily due to lower alternative investment income. Full-service recurring deposits grew 9.6% to $13.6 billion.
Health Solutions adjusted operating earnings amounted to $94 million, which increased more than four-fold year over year due to strong sales growth, favorable underwriting results and the positive impact of the Benefitfocus acquisition, which closed in January 2023. Annualized in-force premiums and fees grew 22% to $3.3 billion. The strong increase reflects growth across all product lines and the positive impact of the Benefitfocus acquisition.
Investment Management posted adjusted operating earnings of $33 million, which plunged 15.4% year over year, due to higher expenses, reflecting timing and elevated seasonal impacts. Net outflows were $0.9 billion during the trailing 12 months ended Mar 31, 2023.
Corporate incurred an adjusted operating loss of $69 million, flat year over year.
Financial Update
Voya Financial exited the quarter with cash and cash equivalents of $724 million, which decreased 21.2% year over year. Total investments amounted to $38.7 billion, down 1% year over year.
Long-term debt at quarter-end was flat from 2022 end at $2.1 billion. The financial leverage ratio deteriorated 630 basis points year over year to 36.1%. As of Mar 31, 2023, book value per share (excluding AOCI) was $59.95, which increased 17.2% year over year.
Voya Financial exited the first quarter with more than $0.5 billion in excess capital.
Acquisition Update
On Jan 24, 2023, Voya completed the acquisition of Benefitfocus, Inc., an industry leader in benefits administration technology, which will help accelerate Voya’s workplace-centered strategy.
Capital Deployment
As of Mar 31, 2023, Voya Financial had $275 million remaining under its share-repurchase authorization effective through Sep 30, 2023. It expects to resume share repurchase activity in the second quarter of 2023 and plans to increase the common stock dividend to an annual yield of approximately 2% in the second half of 2023.
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 subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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 has been net zero. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Top 5 Dividend Stocks for Your Retirement
Zacks targets 5 well-established companies with solid fundamentals and a history of raising dividends. More importantly, they have the resources and will to likely pay them in the future.
Click now for a Special Report packed with unconventional wisdom and insights you simply won’t get from your neighborhood financial planner.
See our Top 5 now – the report is FREE >>
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