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Voya Financial, Inc. (VOYA - Free Report) reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year.
Voya Financial’s results reflected lower alternative investment income, lower investment capital revenues in Investment Management, an unfavorable change in DAC/VOBA and other intangibles unlocking and lower fee-based margin in Wealth Solutions, and higher Group Life claims in Health Solutions. The benefits of share buyback limited the downside.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Total revenues amounted to $1.5 billion, against ($2) billion in the year-ago quarter. Net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year. Premiums totaled $613 million versus ($5) billion in the year-ago quarter.
Total expenses were $1.4 billion versus a benefit of $3 million in the year-ago quarter.
As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $707.3 billion.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $205 million, which slid 19.6% year over year. The downside was due to lower investment income, primarily due to lower alternative investment income, lower fee-based margin, unfavorable change in DAC/VOBA and other intangibles unlocking and higher administrative expenses. Wealth Solutions however generated positive Full Service net flows of $446 million in the reported quarter.
Health Solutions’ adjusted operating earnings amounted to $22 million, which tumbled 40.5% year over year in the first quarter accounting for a higher loss ratio for Group Life, a higher loss ratio for Stop Loss and higher administrative expenses. Total annualized in-force premiums were $2.7 billion, higher than $2.5 billion in the year-ago quarter.
Investment Management posted adjusted operating earnings of $39 million, which plunged 50% year over year attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $253 billion as of Mar 31, 2022, up 2% from Mar 31, 2021. Net inflows for the quarter were $1.3 billion.
Corporate incurred adjusted operating losses of $58 million, narrower than the prior-year quarter’s loss of $71 million attributable to lower net stranded costs associated with Individual Life transaction as well as lower interest expense due to the redemption of debt in 2021.
Financial Update
Voya Financial exited the first quarter with cash and cash equivalents of $1 billion, which slipped 16.7% year over year. Total investments amounted to $43 billion, down 6.5% year over year.
Long-term debt at first-quarter end declined 20% year over year to $2.4 billion. The financial leverage ratio deteriorated 80 basis points (bps) year over year to 28%. As of Dec 31, 2021, book value per share (excluding AOCI) was $49.50, which increased 10.9% year over year. Voya Financial exited the first quarter with roughly $900 million in excess capital, including about $100 million generated in the first quarter.
Capital Deployment
Voya Financial bought back shares worth $500 million in the first quarter. Also, Voya entered into an accelerated share repurchase (ASR) agreement to repurchase $275 million worth shares — $220 million were delivered during the first quarter; the remaining $55 million will be delivered in the second quarter of 2022. In addition to the previously mentioned ASR, Voya repurchased an additional $225 million worth of shares during the first quarter of 2022.
The board of directors approved an additional $500 million share repurchase program.
VOYA paid $21 million in capital in the first quarter. On Apr 28, 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%.
Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.
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Voya Financial (VOYA) Q1 Earnings Top, Revenues Rise Y/Y
Voya Financial, Inc. (VOYA - Free Report) reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year.
Voya Financial’s results reflected lower alternative investment income, lower investment capital revenues in Investment Management, an unfavorable change in DAC/VOBA and other intangibles unlocking and lower fee-based margin in Wealth Solutions, and higher Group Life claims in Health Solutions. The benefits of share buyback limited the downside.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Voya Financial, Inc. price-consensus-eps-surprise-chart | Voya Financial, Inc. Quote
Behind the Headlines
Total revenues amounted to $1.5 billion, against ($2) billion in the year-ago quarter. Net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year. Premiums totaled $613 million versus ($5) billion in the year-ago quarter.
Total expenses were $1.4 billion versus a benefit of $3 million in the year-ago quarter.
As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $707.3 billion.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $205 million, which slid 19.6% year over year. The downside was due to lower investment income, primarily due to lower alternative investment income, lower fee-based margin, unfavorable change in DAC/VOBA and other intangibles unlocking and higher administrative expenses. Wealth Solutions however generated positive Full Service net flows of $446 million in the reported quarter.
Health Solutions’ adjusted operating earnings amounted to $22 million, which tumbled 40.5% year over year in the first quarter accounting for a higher loss ratio for Group Life, a higher loss ratio for Stop Loss and higher administrative expenses. Total annualized in-force premiums were $2.7 billion, higher than $2.5 billion in the year-ago quarter.
Investment Management posted adjusted operating earnings of $39 million, which plunged 50% year over year attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $253 billion as of Mar 31, 2022, up 2% from Mar 31, 2021. Net inflows for the quarter were $1.3 billion.
Corporate incurred adjusted operating losses of $58 million, narrower than the prior-year quarter’s loss of $71 million attributable to lower net stranded costs associated with Individual Life transaction as well as lower interest expense due to the redemption of debt in 2021.
Financial Update
Voya Financial exited the first quarter with cash and cash equivalents of $1 billion, which slipped 16.7% year over year. Total investments amounted to $43 billion, down 6.5% year over year.
Long-term debt at first-quarter end declined 20% year over year to $2.4 billion. The financial leverage ratio deteriorated 80 basis points (bps) year over year to 28%. As of Dec 31, 2021, book value per share (excluding AOCI) was $49.50, which increased 10.9% year over year. Voya Financial exited the first quarter with roughly $900 million in excess capital, including about $100 million generated in the first quarter.
Capital Deployment
Voya Financial bought back shares worth $500 million in the first quarter. Also, Voya entered into an accelerated share repurchase (ASR) agreement to repurchase $275 million worth shares — $220 million were delivered during the first quarter; the remaining $55 million will be delivered in the second quarter of 2022. In addition to the previously mentioned ASR, Voya repurchased an additional $225 million worth of shares during the first quarter of 2022.
The board of directors approved an additional $500 million share repurchase program.
VOYA paid $21 million in capital in the first quarter. On Apr 28, 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%.
Zacks Rank
VOYA 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 first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.
Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.
RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.
Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.