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Principal Financial (PFG) Q4 Earnings Beat, Decrease Y/Y
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Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2022 operating net income of $1.70 per share beat the Zacks Consensus Estimate by 11.8% as well as our estimate of $1.10 per share. However, it decreased 8.1% year over year.
Principal Financial witnessed soft performance across most of the segments and lower assets under management which were offset by lower expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
For 2022, Principal Financial reported an operating net income of $6.66 per share, which beat the Zacks Consensus Estimate by 2.6%. Moreover, it decreased 1.6% year over year.
Total operating revenues of $13.47 billion beat the consensus mark by 2.1%. However, it decreased 6.8% year over year.
Behind the Headlines
Operating revenues decreased 12% year over year to nearly $3.6 billion. The decrease was due to lower fees and other revenues and net investment income. The top line beat the Zacks Consensus Estimate by 8.6%. The figure was higher than our estimate of $2.8 billion.
Total expenses decreased 10.5% year over year to $3.1 billion due to lower operating expenses and benefits, claims and settlement expenses. The figure was higher than our estimate of $2.9 billion.
Principal Financial’s asset under management (AUM) as of Dec 31, 2022 was $635.3 billion, down 11% year over year.
Segment Update
Retirement and Income Solution: Revenues decreased 9.6% year over year to about $1.8 billion.
Pre-tax operating earnings decreased 27.8% to $238 million on account of soft performance at Retirement and Income Solution- Spread business. The figure was higher than our estimate of $236.8 million.
Principal Global Investors: Revenues of $410.6 million were down 16.9% from the prior-year quarter.
Operating earnings decreased 28.1% year over year to $138.6 million, primarily due to lower operating revenues less pass-through expenses.
Principal International: Revenues decreased 15.7% year over year to $345 million in the quarter.
Pre-tax operating earnings decreased 12.8% to $91.7 million due to lower combined net revenues. The figure was lower than our estimate of $144.4 million.
U.S. Insurance Solution: Revenues decreased 12.1% year over year to $1 billion.
Pre-Tax operating earnings of $128.5 million increased 32% year over year driven by improved performance at the Specialty Benefits Insurance business. The figure was higher than our estimate of $68 million.
Corporate: Operating loss of $86.7 million was narrower than the $94.4 million loss incurred a year ago, owing to higher-than-expected variable investment income.
Financial Update
As of Dec 31, 2022, cash and cash equivalents were $4.8 billion, doubled year over year.
At the fourth-quarter end, debt was $4 billion, down 6.6%.
As of Dec 31, 2022, book value per share (excluding AOCI other than foreign currency translation adjustment) was $52.27, up 6.1% year over year.
Capital Deployment
Principal Financial paid out $156.2 million in dividends and bought back shares worth $250.3 million in the fourth quarter.
The board of directors approved a first-quarter dividend of 64 cents per share.
T. Rowe Price Group, Inc. (TROW - Free Report) reported fourth-quarter 2022 adjusted earnings per share of $1.74, which outpaced the Zacks Consensus Estimate of $1.72. The bottom line, however, declined 45.1% year over year. Net income attributable to T. Rowe Price was $266 million, down 64.1% from the prior-year quarter.
In 2022, adjusted earnings of $8.02 per share beat the consensus estimate of $7.98 but declined 37.1% year over year. Net income attributable to T. Rowe Price was $1.56 billion, plunging 49.5%. Investment advisory fees fell 24.4% to $1.37 billion. Administrative, distribution and servicing fees decreased 14.9% to $129.4 million.
SEI Investments Co.’s (SEIC - Free Report) fourth-quarter 2022 earnings of 83 cents per share outpaced the Zacks Consensus Estimate of 79 cents. The bottom line, however, reflects a decline of 19% from the prior-year quarter. Net income was $112.2 million, down 23% from the year-ago quarter. In 2022, earnings per share of $3.46 declined 9% year over year. Net income fell 13% to $475.5 million. Operating income plunged 34% year over year to $94 million.
As of Dec 31, 2022, AUM was $399.4 billion, reflecting a decline of 1% from the prior-year quarter. Client assets under administration (AUA) were $814.6 billion, down 11%. Client AUA did not include $12.5 billion related to Funds of Funds assets reported on Dec 31, 2022.
Ameriprise Financial’s (AMP - Free Report) fourth-quarter 2022 adjusted operating earnings (excluding unlocking) of $6.94 per share handily surpassed the Zacks Consensus Estimate of $6.35. The bottom line reflects a rise of 13% from the year-ago quarter. We had projected the same to be $6.20. After considering significant items, net income (GAAP basis) was $494 million or $4.43 per share, down from $701 million or $5.96 per share in the prior-year quarter.
In 2022, adjusted operating earnings of $25.14 outpaced the consensus estimate of $24.54 and grew 11% year over year. Net income (GAAP basis) was $2.56 billion or $22.51 per share, down from $2.76 billion or $23.00 per share in 2021. Adjusted operating expenses totaled $2.67 billion, which declined 5%. We had projected the same to be $2.51 billion. Total AUM and AUA decreased 17% year over year to $1.18 trillion on market depreciation.
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Principal Financial (PFG) Q4 Earnings Beat, Decrease Y/Y
Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2022 operating net income of $1.70 per share beat the Zacks Consensus Estimate by 11.8% as well as our estimate of $1.10 per share. However, it decreased 8.1% year over year.
Principal Financial witnessed soft performance across most of the segments and lower assets under management which were offset by lower expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Principal Financial Group, Inc. price-consensus-eps-surprise-chart | Principal Financial Group, Inc. Quote
Full-Year Highlights
For 2022, Principal Financial reported an operating net income of $6.66 per share, which beat the Zacks Consensus Estimate by 2.6%. Moreover, it decreased 1.6% year over year.
Total operating revenues of $13.47 billion beat the consensus mark by 2.1%. However, it decreased 6.8% year over year.
Behind the Headlines
Operating revenues decreased 12% year over year to nearly $3.6 billion. The decrease was due to lower fees and other revenues and net investment income. The top line beat the Zacks Consensus Estimate by 8.6%. The figure was higher than our estimate of $2.8 billion.
Total expenses decreased 10.5% year over year to $3.1 billion due to lower operating expenses and benefits, claims and settlement expenses. The figure was higher than our estimate of $2.9 billion.
Principal Financial’s asset under management (AUM) as of Dec 31, 2022 was $635.3 billion, down 11% year over year.
Segment Update
Retirement and Income Solution: Revenues decreased 9.6% year over year to about $1.8 billion.
Pre-tax operating earnings decreased 27.8% to $238 million on account of soft performance at Retirement and Income Solution- Spread business. The figure was higher than our estimate of $236.8 million.
Principal Global Investors: Revenues of $410.6 million were down 16.9% from the prior-year quarter.
Operating earnings decreased 28.1% year over year to $138.6 million, primarily due to lower operating revenues less pass-through expenses.
Principal International: Revenues decreased 15.7% year over year to $345 million in the quarter.
Pre-tax operating earnings decreased 12.8% to $91.7 million due to lower combined net revenues. The figure was lower than our estimate of $144.4 million.
U.S. Insurance Solution: Revenues decreased 12.1% year over year to $1 billion.
Pre-Tax operating earnings of $128.5 million increased 32% year over year driven by improved performance at the Specialty Benefits Insurance business. The figure was higher than our estimate of $68 million.
Corporate: Operating loss of $86.7 million was narrower than the $94.4 million loss incurred a year ago, owing to higher-than-expected variable investment income.
Financial Update
As of Dec 31, 2022, cash and cash equivalents were $4.8 billion, doubled year over year.
At the fourth-quarter end, debt was $4 billion, down 6.6%.
As of Dec 31, 2022, book value per share (excluding AOCI other than foreign currency translation adjustment) was $52.27, up 6.1% year over year.
Capital Deployment
Principal Financial paid out $156.2 million in dividends and bought back shares worth $250.3 million in the fourth quarter.
The board of directors approved a first-quarter dividend of 64 cents per share.
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 Investment Managers
T. Rowe Price Group, Inc. (TROW - Free Report) reported fourth-quarter 2022 adjusted earnings per share of $1.74, which outpaced the Zacks Consensus Estimate of $1.72. The bottom line, however, declined 45.1% year over year. Net income attributable to T. Rowe Price was $266 million, down 64.1% from the prior-year quarter.
In 2022, adjusted earnings of $8.02 per share beat the consensus estimate of $7.98 but declined 37.1% year over year. Net income attributable to T. Rowe Price was $1.56 billion, plunging 49.5%. Investment advisory fees fell 24.4% to $1.37 billion. Administrative, distribution and servicing fees decreased 14.9% to $129.4 million.
SEI Investments Co.’s (SEIC - Free Report) fourth-quarter 2022 earnings of 83 cents per share outpaced the Zacks Consensus Estimate of 79 cents. The bottom line, however, reflects a decline of 19% from the prior-year quarter. Net income was $112.2 million, down 23% from the year-ago quarter. In 2022, earnings per share of $3.46 declined 9% year over year. Net income fell 13% to $475.5 million. Operating income plunged 34% year over year to $94 million.
As of Dec 31, 2022, AUM was $399.4 billion, reflecting a decline of 1% from the prior-year quarter. Client assets under administration (AUA) were $814.6 billion, down 11%. Client AUA did not include $12.5 billion related to Funds of Funds assets reported on Dec 31, 2022.
Ameriprise Financial’s (AMP - Free Report) fourth-quarter 2022 adjusted operating earnings (excluding unlocking) of $6.94 per share handily surpassed the Zacks Consensus Estimate of $6.35. The bottom line reflects a rise of 13% from the year-ago quarter. We had projected the same to be $6.20. After considering significant items, net income (GAAP basis) was $494 million or $4.43 per share, down from $701 million or $5.96 per share in the prior-year quarter.
In 2022, adjusted operating earnings of $25.14 outpaced the consensus estimate of $24.54 and grew 11% year over year. Net income (GAAP basis) was $2.56 billion or $22.51 per share, down from $2.76 billion or $23.00 per share in 2021. Adjusted operating expenses totaled $2.67 billion, which declined 5%. We had projected the same to be $2.51 billion. Total AUM and AUA decreased 17% year over year to $1.18 trillion on market depreciation.