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Principal Financial (PFG) Q3 Earnings Top, Revenues Fall Y/Y
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Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2022 operating net income of $1.69 per share beat the Zacks Consensus Estimate by 16.6% as well as our estimate of 98 cents per share. The bottom line remained unchanged year over year.
Principal Financial witnessed lower expenses and higher revenues in Principal International, offset by lower assets under management (AUM).
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Operating revenues decreased 4.6% year over year to $3.4 billion due to lower net investment income and fees and other revenues. The figure was higher than our estimate of $2.9 billion.
Total expenses decreased 4.2% year over year to $2.9 billion due to lower benefits, claims and settlement expenses, operating expenses and dividends to policyholders.
Principal Financial’s AUM as of Sep 30, 2022 amounted to $608 billion, down 11.7% year over year.
Segment Update
Retirement and Income Solution: Revenues decreased 4.2% year over year to about $1.6 billion due to lower fees and other revenues and net investment income.
Pre-tax operating earnings increased 14.6% year over year to $278.6 million.
Principal Global Investors: Revenues of $406 million were down 12.7% from the prior-year quarter due to lower fees and other revenues.
Pre-tax operating earnings decreased 25% year over year to $142 million due to lower operating revenues less pass-through expenses.
Principal International: Revenues increased 14.9% year over year to $376.9 million in the quarter due to higher net investment income.
Pre-tax operating earnings decreased 18% year over year to $66.7 million due to lower combined net revenues.
U.S. Insurance Solution: Revenues decreased 8.2% year over year to $1.1 billion due to lower net investment income, fees and other revenues.
Operating earnings of $135.7 million decreased 10.5% year over year, mainly due to soft performance at the Individual Life Insurance business, offset by improved performance at the Specialty Benefits Insurance.
Corporate: Pre-tax operating loss of $100.8 million was wider than the $97.1 million loss incurred a year ago. This downside was due to lower than expected variable investment income.
Financial Update
As of Sep 30, 2022, cash and cash equivalents were $4.2 billion, up 34.8% year over year.
At third-quarter end, debt was $3.9 billion, down 7% from 2021-end.
As of Sep 30, 2022, book value per share (excluding AOCI other than foreign currency translation adjustment) was $50.55, up 2.6% year over year.
Dividend and Share Repurchase Update
Principal Financial returned $607 million of capital to shareholders, including $450 million in share repurchases and $157 million of dividends.
The board of directors approved fourth-quarter dividend of 64 cents per share. The dividend will be paid out on Dec 19, 2022, to shareholders of record as of Dec 1, 2022.
Of the finance stocks that have reported third-quarter results so far, T. Rowe Price Group, Inc. (TROW - Free Report) , Ameriprise Financial, Inc. (AMP - Free Report) and SEI Investments Company (SEIC - Free Report) beat the respective Zacks Consensus Estimate for earnings.
T. Rowe Price reported third-quarter 2022 adjusted earnings per share of $1.86, which outpaced the Zacks Consensus Estimate of $1.83. The reported figure also declined 45.9% year over year. Net income attributable to T. Rowe Price was $384.4 million, down 50.5% from the prior-year quarter.
Net revenues in the third quarter decreased 18.7% to $1.59 billion from the year-ago quarter. Investment advisory fees fell 20.5% year over year to $1.44 billion. Administrative, distribution and servicing fees increased 3.1% to $145.1 million.
Ameriprise Financial’s third-quarter 2022 adjusted operating earnings (excluding unlocking) of $6.43 per share handily surpassed the Zacks Consensus Estimate of $5.82. The bottom line reflected a rise of 9% from the year-ago quarter. We had projected the same to be $5.99.
On an operating basis, adjusted total net revenues (excluding unlocking) were $3.54 billion, up 1% year over year. The top line beat the Zacks Consensus Estimate of $3.42 billion. Our estimate for the metric was $3.46 billion. On a GAAP basis, net revenues were $3.49 billion, jumping 20%.
SEI Investments’ third-quarter 2022 adjusted earnings of 77 cents per share outpaced the Zacks Consensus Estimate of 69 cents. The bottom line, however, reflected a decline of 21% from the prior-year quarter.
Total revenues were $471.3 million, down 3% year over year. The top line, however, beat the Zacks Consensus Estimate of $459.4 million. Operating income plunged 64% year over year to $51 million.
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Principal Financial (PFG) Q3 Earnings Top, Revenues Fall Y/Y
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2022 operating net income of $1.69 per share beat the Zacks Consensus Estimate by 16.6% as well as our estimate of 98 cents per share. The bottom line remained unchanged year over year.
Principal Financial witnessed lower expenses and higher revenues in Principal International, offset by lower assets under management (AUM).
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Principal Financial Group, Inc. price-consensus-eps-surprise-chart | Principal Financial Group, Inc. Quote
Behind the Headlines
Operating revenues decreased 4.6% year over year to $3.4 billion due to lower net investment income and fees and other revenues. The figure was higher than our estimate of $2.9 billion.
Total expenses decreased 4.2% year over year to $2.9 billion due to lower benefits, claims and settlement expenses, operating expenses and dividends to policyholders.
Principal Financial’s AUM as of Sep 30, 2022 amounted to $608 billion, down 11.7% year over year.
Segment Update
Retirement and Income Solution: Revenues decreased 4.2% year over year to about $1.6 billion due to lower fees and other revenues and net investment income.
Pre-tax operating earnings increased 14.6% year over year to $278.6 million.
Principal Global Investors: Revenues of $406 million were down 12.7% from the prior-year quarter due to lower fees and other revenues.
Pre-tax operating earnings decreased 25% year over year to $142 million due to lower operating revenues less pass-through expenses.
Principal International: Revenues increased 14.9% year over year to $376.9 million in the quarter due to higher net investment income.
Pre-tax operating earnings decreased 18% year over year to $66.7 million due to lower combined net revenues.
U.S. Insurance Solution: Revenues decreased 8.2% year over year to $1.1 billion due to lower net investment income, fees and other revenues.
Operating earnings of $135.7 million decreased 10.5% year over year, mainly due to soft performance at the Individual Life Insurance business, offset by improved performance at the Specialty Benefits Insurance.
Corporate: Pre-tax operating loss of $100.8 million was wider than the $97.1 million loss incurred a year ago. This downside was due to lower than expected variable investment income.
Financial Update
As of Sep 30, 2022, cash and cash equivalents were $4.2 billion, up 34.8% year over year.
At third-quarter end, debt was $3.9 billion, down 7% from 2021-end.
As of Sep 30, 2022, book value per share (excluding AOCI other than foreign currency translation adjustment) was $50.55, up 2.6% year over year.
Dividend and Share Repurchase Update
Principal Financial returned $607 million of capital to shareholders, including $450 million in share repurchases and $157 million of dividends.
The board of directors approved fourth-quarter dividend of 64 cents per share. The dividend will be paid out on Dec 19, 2022, to shareholders of record as of Dec 1, 2022.
Zacks Rank
Principal 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 Finance Stocks
Of the finance stocks that have reported third-quarter results so far, T. Rowe Price Group, Inc. (TROW - Free Report) , Ameriprise Financial, Inc. (AMP - Free Report) and SEI Investments Company (SEIC - Free Report) beat the respective Zacks Consensus Estimate for earnings.
T. Rowe Price reported third-quarter 2022 adjusted earnings per share of $1.86, which outpaced the Zacks Consensus Estimate of $1.83. The reported figure also declined 45.9% year over year. Net income attributable to T. Rowe Price was $384.4 million, down 50.5% from the prior-year quarter.
Net revenues in the third quarter decreased 18.7% to $1.59 billion from the year-ago quarter. Investment advisory fees fell 20.5% year over year to $1.44 billion. Administrative, distribution and servicing fees increased 3.1% to $145.1 million.
Ameriprise Financial’s third-quarter 2022 adjusted operating earnings (excluding unlocking) of $6.43 per share handily surpassed the Zacks Consensus Estimate of $5.82. The bottom line reflected a rise of 9% from the year-ago quarter. We had projected the same to be $5.99.
On an operating basis, adjusted total net revenues (excluding unlocking) were $3.54 billion, up 1% year over year. The top line beat the Zacks Consensus Estimate of $3.42 billion. Our estimate for the metric was $3.46 billion. On a GAAP basis, net revenues were $3.49 billion, jumping 20%.
SEI Investments’ third-quarter 2022 adjusted earnings of 77 cents per share outpaced the Zacks Consensus Estimate of 69 cents. The bottom line, however, reflected a decline of 21% from the prior-year quarter.
Total revenues were $471.3 million, down 3% year over year. The top line, however, beat the Zacks Consensus Estimate of $459.4 million. Operating income plunged 64% year over year to $51 million.