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Voya Financial (VOYA) Q2 Earnings & Revenues Beat Estimates

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Voya Financial, Inc.’s (VOYA - Free Report) second-quarter 2021 net operating income of $2.20 per share beat the Zacks Consensus Estimate by 56%. Moreover, the bottom line doubled year over year.

Results benefited from higher investment income, lower expenses and a solid performance in each of its core businesses.

Revenues of $424 million surpassed the Zacks Consensus Estimate by 58.2%. Moreover, the top line increased more than four-fold from the year-ago quarter’s level.

Net investment income increased11.9% to $656 million in the quarter.

Fee income declined 6% year over year to $435 million.

Premiums decrease14.9% year over year to $516 million.

Total benefits and expenses decreased 13.8% year over year to $1.5 billion owing to lower interest credited and other benefits to contract owners and policyholders.

Assets under management and administration were $721 billion as of Jun 30, 2021.

Voya Financial, Inc. Price, Consensus and EPS Surprise

Voya Financial, Inc. Price, Consensus and EPS Surprise

Voya Financial, Inc. price-consensus-eps-surprise-chart | Voya Financial, Inc. Quote

Segmental Update

Wealth Solutions’ adjusted operating earnings of $295 million increased nearly eight-fold year over year owing to $201 million of higher investment income, $67 million of increased fee-based margin, a $10-million worth favorable change in deferred acquisition costs and value of business acquired (DAC/VOBA), $4 million of lower administrative expenses and other intangibles unlocking.

Investment Management posted adjusted operating earnings of $66 million, which increased more than three-fold year over year owing to $48 million of higher investment capital revenues and $15 million of expanded fee-based margin, partially offset by lower revenues due to the company's Jan 4, 2021 sale of its Individual Life and other legacy annuities businesses as well as $18 million of higher administrative expenses.

It generated $440 million of institutional net flows in the second quarter, which plunged 94% year over year.

Health Solutions’ adjusted operating earnings were $63 million, up 75% year over year on $17-million of higher underwriting results and $25 million of improved investment income, partially offset by $10 million of higher administrative expenses.

Corporate incurred adjusted operating losses of $71 million, narrower than the year-ago quarterly loss of $75 million. Results indicate revenue in the second quarter of 2021 from the company's transition service agreements and lower stranded costs associated with the Individual Life transaction as well as lower intangibles amortization. These were partially offset by an increased incentive compensation due to higher alternative investment income.

Financial Update

As of Jun 30, 2021, cash and cash equivalents were $1.8 billion, up 59% year over year.

As of Jun 30, 2021, total investments were $45.9 billion, down 17.2% year over year.

At the second-quarter end, long-term debt was $2.9 billion, down 2.5% from the level at 2020 end.

Financial leverage ratio expanded 200 bps to 30.2% from the 2020-end level.
As of Jun 30, 2021, book value per share (excluding accumulated other comprehensive income) was $46.90, up 26.6% from the level at 2020 end.
Voya Financial exited the second quarter with $1.5 billion in excess capital.

Share Repurchase and Dividend Update

In second-quarter 2021, Voya Financial repurchased shares worth $518 million. The company has $332 million left under its existing share buyback program as of Jun 30, 2021.

It approved a quarterly dividend of 165 cents per share to be paid out on Sep 29, 2021 to its shareholders of record as of Aug 26.

Zacks Rank

Voya Financial currently carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported second-quarter results so far, earnings of Prudential Financial, Inc. (PRU - Free Report) , MGIC Investment Corporation (MTG - Free Report) and American Financial Group (AFG - Free Report) beat the respective Zacks Consensus Estimate.