A month has gone by since the last earnings report for Voya Financial (VOYA Quick QuoteVOYA - Free Report) . Shares have added about 0.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Voya due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Voya Financial Q1 Earnings Top, Revenues Rise Y/Y

Voya Financial 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.

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%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -9.23% due to these changes.

VGM Scores

At this time, Voya has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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.

Performance of an Industry Player

Voya belongs to the Zacks Insurance - Life Insurance industry. Another stock from the same industry, China Life , has gained 2.8% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

China Life reported revenues of $55.22 billion in the last reported quarter, representing a year-over-year change of +361.5%. EPS of $0.43 for the same period compares with $0.08 a year ago.