Back to top

Image: Shutterstock

What Awaits Principal Financial (PFG) This Earnings Season?

Read MoreHide Full Article

Principal Financial Group, Inc. (PFG - Free Report) is slated to report third-quarter 2020 results on Oct 26, after market close. The company delivered an earnings surprise of 11.45% in the last reported quarter.

Let’s see what’s in store for the company this time around.

Principal Financial third-quarter results are expected to reflect lower annuity sales, decrease in variable investment income. Assets under management are likely to have increased.

Given low interest rate environment, the company estimates a slowdown in pension risk transfer sales as well as lower annuity sales in the third quarter.

Lower single premium annuity sales and foreign currency headwinds in Latin America are likely to have affected revenues of Principal International segment.

In U.S. Insurance Solutions segment, earnings from dental and vision are likely to have been affected by dental premium credits and increased dental utilization.

Lower sales of single premium group and individual annuities with life contingencies, foreign currency headwinds in Latin America, decrease in variable investment income, unfavorable relative market performance are likely to have hurt revenue growth in the to-be-reported quarter.

Lower variable investment income, foreign currency headwinds in Latin America business, lower yields and prepayments in U.S. operations are likely to have hurt the company’s net investment income in the to-be-reported quarter.

Assets under management are likely to have benefited from favorable market performance as well as positive net cash flow.

Expenses are likely to have increased due to higher operating expenses.

Operating expenses are likely to have increased due to acquired business and increase in deferred acquisition costs (DAC) amortization, stemming from unfavorable financial markets.

The Zacks Consensus Estimate for earnings stands at $1.47 per share, indicating a decline of 19.5% from the year-ago reported figure.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Principal Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Principal Financial has an Earnings ESP of +0.85%. This is because the Most Accurate Estimate of $1.48 is pegged higher than the Zacks Consensus Estimate of $1.47. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Principal Financial Group, Inc. Price and EPS Surprise

Zacks Rank: Principal Financial carries a Zacks Rank #2.  

Other Stocks to Consider  

Some stocks from the investment management industry with the right combination of elements to surpass estimates this time around are as follows:

Apollo Global Management, LLC (APO - Free Report) has an Earnings ESP of +4.17% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Affiliated Managers Group, Inc. (AMG - Free Report) has an Earnings ESP of +0.35% and a Zacks Rank #3.

Ares Management L.P. (ARES - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank of 2.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>