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What Awaits Principal Financial (PFG) This Earnings Season?

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Principal Financial Group, Inc. (PFG - Free Report) is slated to report first-quarter 2021 results on Apr 27, after market close. The company delivered an earnings surprise of 3.5% in the last reported quarter.

Factors at Play 

Principal Financial first-quarter results are expected to reflect lower sales of single premium group and foreign currency headwinds. Assets under management are likely to have improved, driven by positive net cash flow, favorable market performance and the migration of some of the Institutional Retirement & Trust (IRT) retirement business.

Given the low interest rate environment, the company estimates lower sales in the pension risk transfer and individual annuities with life contingencies in the first quarter.

Unfavorable impacts from inflation in Brazil and foreign currency translation are likely to have affected revenues of the Principal International segment. The downside is likely to have been offset by improved Encaje performance in Latin America.

In the U.S. Insurance Solutions segment, Specialty Benefits insurance business is likely to have been affected by unfavorable non-COVID related group life and disability claims.

Lower sales of single premium group and individual annuities with life contingencies, foreign currency headwinds, lower fees and other revenues are likely to have hurt revenue growth in the to-be-reported quarter.

The Zacks Consensus Estimate for first-quarter 2021 revenues is pegged at $3.8 billion, indicating a decrease of 14.8% from the year-ago quarter reported figure.

Foreign currency headwinds, lower income from our equity method investments in Brazil, unfavorable relative market performance on its required regulatory investments, lower rates on fixed maturities and cash and cash equivalents are likely to have hurt the company’s net investment income in the to-be-reported quarter. The downside is likely to have been partially offset by higher average invested assets.

Expenses are likely to have decreased due to lower operating expenses and benefits, claims and settlement expenses.

Operating expenses are likely to have decreased due to lower compensation and amortization of DAC and contract costs.

The Zacks Consensus Estimate for first-quarter 2021 earnings stands at $1.35 per share, indicating an increase of 17.3% from the year-ago reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict 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. But that’s not the case here.

Earnings ESP: Principal Financial has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at $1.35. 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 currently carries a Zacks Rank #3.  

Stocks to Consider  

Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:

Carlyle Group Inc. (CG - Free Report) has an Earnings ESP of +1.85% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

T. Rowe Price Group, Inc. (TROW - Free Report) has an Earnings ESP of +0.34% and a Zacks Rank #2.

Janus Henderson Group plc (JHG - Free Report) has an Earnings ESP of +2.44% and a Zacks Rank of 2.

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