Back to top

Image: Bigstock

What Awaits Principal Financial (PFG) This Earnings Season?

Read MoreHide Full Article

Principal Financial Group, Inc. (PFG - Free Report) is slated to report first-quarter 2022 earnings on Apr 28, after market close. PFG delivered an earnings surprise in each of the last four quarters, the average being 11.06%.

Factors at Play

Principal Financial first-quarter results are likely to reflect benefits from higher variable investment income, favorable U.S. market performance and higher net cash flow.

Premiums in the Retirement and Income Solutions segment are likely to have been affected by lower sales of the single premium group and individual annuities with life contingencies.

Investment income is expected to have benefited from higher variable investment income, growth in average invested assets and favorable U.S. market performance on certain alternative investments. Higher bond prepayments included in variable investment income as well as higher inflation-based investment returns on Latin America average invested assets and cash are also likely to have added to the upside.

Higher premiums and fees in Specialty Benefits insurance business, higher management fee revenue, higher performance fee revenues in real estate business and higher fees stemming from an increase in mean account values are likely to have benefited revenue growth in the to-be-reported quarter.

The Zacks Consensus Estimate for first-quarter 2022 revenues is pegged at $3.67 billion, indicating an increase of 17.7% from the year-ago quarter reported figure.

Assets under management is likely to have benefited from favorable market performance, higher net cash flow and positive market returns.

Expenses are likely to have increased due to higher benefits, claims and settlement expenses and operating expenses.

Operating expenses are likely to have increased due to an increase in variable compensation expense, higher variable expenses related to increased AUM and higher non-variable staff costs, increase in compensation costs and higher incentive compensation.

Continued share buybacks are likely to have provided additional upside to the bottom line.

The Zacks Consensus Estimate for first-quarter 2022 earnings stands at $1.51 per share, indicating a decline of 1.3% 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. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which is not the case here.

Earnings ESP: Principal Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $1.51. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Principal Financial currently carries a Zacks Rank #3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

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

CullenFrost Bankers (CFR - Free Report) has an Earnings ESP of +1.30% and a Zacks Rank of 1. The Zacks Consensus Estimate for CullenFrost Bankers’ first-quarter 2022 earnings is pegged at $1.49 per share, indicating a decline of 15.8% from the year-ago reported figure.

CFR’s earnings beat estimates in each of the four quarters of 2021.

Banco De Chile (BCH - Free Report) has an Earnings ESP of +24.31% and a Zacks Rank of 2. The Zacks Consensus Estimate for Banco De Chile’s first-quarter 2022 earnings is pegged at 60 cents per share, indicating an increase of 36.4% from the year-ago reported figure.

BCH’s earnings beat estimates in two of the four quarters of 2021.

Camden Property Trust (CPT - Free Report) has an Earnings ESP of +0.07% and a Zacks Rank of 2. The Zacks Consensus Estimate for Camden Property Trust’s first-quarter 2022 earnings is pegged at $1.49 per share, indicating an increase of 20.1% from the year-ago reported figure.

CPT’s earnings beat estimates in each of the four reported quarters of 2021.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.