A month has gone by since the last earnings report for Voya Financial (VOYA Quick QuoteVOYA - Free Report) . Shares have lost about 11.6% 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 Q4 Earnings Beat, Revenues Down Y/Y

Voya Financial, Inc. reported fourth-quarter 2021 adjusted operating earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate by 28.4%. The bottom line remained flat year over year.

Voya Financial’s results highlight solid alternative investment income, consistent growth across its businesses, and reduced benefits and expenses. However, the upside has been partly offset by a year-over-year decline in revenues.

Behind the Headlines

Total revenues amounted to $1.7 billion, which declined 19.2% year over year in the fourth quarter. Net investment income declined 18.4% year over year to $673 million. Meanwhile, fee income of $446 million decreased 18.9% year over year. Premiums totaled $544 million, which slumped 8.9% year over year in the quarter under review.

Total benefits and expenses fell 20.5% year over year to $1.4 billion due to lower interest credited and other benefits to contract owners/policyholders, coupled with operating expenses. As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $739 billion.

Segmental Update

Wealth Solutions reported adjusted operating earnings of $241 million, which slid 6.6% year over year. The downside was due to less favorable DAC/VOBA and other intangibles unlocking and escalating administrative expenses stemming from the timing of specific advertising and technology-related expenses, partly offset by improved investment income and better fee-based margin.

Investment Management’s adjusted operating earnings amounted to $59 million, which tumbled 34.4% year over year in the fourth quarter on account of a decrease in fee-based margin. However, the segment’s results partly benefited on the back of a rise in investment capital revenues and reduced administrative expenses. It had $9.5 billion of institutional net inflows in the fourth quarter, against the prior-year quarter’s outflow of $563 million.

Health Solutions posted adjusted operating earnings of $33 million, which plunged 34% year over year. Results were dampened by increased Group Life loss ratio and business growth resulting in elevated administrative expenses. However, the segment gained on improved investment income.

Corporate incurred adjusted operating losses of $54 million, narrower than the prior-year quarter’s loss of $94 million. The transition service agreements of Voya Financial, continued removal of stranded costs linked with the Individual Life transaction and reduced interest expenses contributed to the segment’s better performance.

Financial Update

Voya Financial exited the fourth quarter with cash and cash equivalents of $1.4 billion, which slipped 6.7% year over year. Total investments amounted to $45.6 billion, down 19.8% year over year.

Long-term debt at the fourth-quarter end declined 14.8% year over year to $2.6 billion. Financial leverage ratio improved 60 basis points (bps) year over year to 27.6%. As of Dec 31, 2021, book value per share (excluding AOCI) was $51.40, which increased 38.8% year over year. Voya Financial exited the fourth quarter with roughly $1.5 billion in excess capital.

Capital Deployment

Voya Financial returned $331 million to its shareholders in the form of share repurchases worth $310 million and dividends worth $21 million in the fourth quarter.

First-Quarter 2022 Dividend Declared

On Jan 27, 2022, the board of directors at VOYA approved a first-quarter 2022 common stock dividend of 20 cents per share, which seems to be in line with the company’s endeavor of maintaining its dividend yield above 1%. The first-quarter dividend will be paid on Mar 30, 2022 to shareholders of record as of Feb 25.

Full-Year Update

For 2021, Voya Financial posted record adjusted operating earnings of $8.37 per share, which beat the Zacks Consensus Estimate of $7.97. The bottom line increased nearly three-fold year over year.

In the year, VOYA achieved a record level of excess capital deployed amounting to $1.7 billion (via $1.1 billion in share buybacks, $500 million in redemption of senior debt and $80 million through dividends).

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Voya has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.