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Voya (VOYA) Down 0.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have lost about 0.9% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Voya Financial Q4 Earnings Top, Revenues Down Y/Y
Voya Financial reported fourth-quarter 2022 adjusted operating earnings of $2.18 per share, which surpassed the Zacks Consensus Estimate by 42.5%. The bottom line increased 14.7% year over year.
The increase reflects the benefits of favorable tax adjustments primarily related to foreign tax credits, higher investment income in Wealth Solutions, the benefit of the Allianz Global Investors transaction in Investment Management and higher underwriting results in Health Solutions.
Behind the Headlines
Adjusted operating revenues amounted to $1.5 billion, which decreased 4.4% year over year. Net investment income declined 18.6% year over year to $548 million. Meanwhile, fee income of $452 million increased 1.3% year over year. Premiums totaled $610 million, up 12.1% from the year-ago quarter.
Total benefits and expenses were $1.5 billion, up 6.7% from the year-ago quarter. As of Dec 31, 2022, VOYA’s assets under management totaled $321 billion, up 22% year over year.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $148 million, which decreased 38.5% year over year. The downside was due to lower investment income and lower fee-based margin, partially offset by a favorable change in DAC/VOBA and other intangibles unlocking and lower administrative expenses. However, Wealth Solutions generated positive full-service net flows of $952 million in the reported quarter, up 207.6% year over year.
Health Solutions adjusted operating earnings amounted to $74 million, which increased 124.4% year over year in the fourth quarter, accounting for the higher underwriting results, partially offset by lower overall investment income and higher net expenses. Total annualized in-force premiums were $2.8 billion, up 10.7% year over year. The increase reflects growth across all product lines, including a 20% increase in Voluntary.
Investment Management posted adjusted operating earnings of $57 million, which plunged 3.4% year over year, attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $321 billion as of Dec 31, 2022, up 21.8% year over year. Institutional net inflows for the quarter were $345 million.
Corporate incurred an adjusted operating loss of $52 million, narrower than the prior-year quarter’s loss of $54 million, which reflected lower interest expense due to debt extinguishments, partially offset by an unfavorable change in amortization of intangibles.
Full-Year Highlights
Adjusted operating revenue was $6.1 billion, down 5.2% from 2021. Adjusted operating earnings were $7.58 per share, down 9.4% from 2021. Net investment income and fee income for 2022 were $1.8 billion and 1.7 billion, down 20.5% and 1.4%, respectively.
Financial Update
Voya Financial exited 2022 with cash and cash equivalents of $919 million, which decreased 34.4% year over year. Total investments amounted to $39.1 billion, down 14.19% year over year.
Long-term debt in 2022-end declined 19.3% year over year to $2.1 billion. The financial leverage ratio deteriorated 850 basis points year over year to 36.1%. As of Dec 31, 2022, book value per share (excluding AOCI) was $58.14, which increased 13.1% year over year. Voya Financial exited the fourth quarter with more than $0.9 billion in excess capital.
Acquisition Update
On Jan 24, 2023, Voya completed the acquisition of Benefitfocus, Inc., an industry leader in benefits administration technology, which will help accelerate Voya’s workplace-centered strategy.
Capital Deployment
During 2022, Voya utilized $750 million of excess capital to repurchase shares, $360 million to extinguish subordinated debt and $80 million to pay dividends. On Jan 26, 2023, Voya's board of directors declared a common stock dividend of $0.20 per share for the first quarter of 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Voya has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Voya has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Voya (VOYA) Down 0.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have lost about 0.9% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Voya Financial Q4 Earnings Top, Revenues Down Y/Y
Voya Financial reported fourth-quarter 2022 adjusted operating earnings of $2.18 per share, which surpassed the Zacks Consensus Estimate by 42.5%. The bottom line increased 14.7% year over year.
The increase reflects the benefits of favorable tax adjustments primarily related to foreign tax credits, higher investment income in Wealth Solutions, the benefit of the Allianz Global Investors transaction in Investment Management and higher underwriting results in Health Solutions.
Behind the Headlines
Adjusted operating revenues amounted to $1.5 billion, which decreased 4.4% year over year. Net investment income declined 18.6% year over year to $548 million. Meanwhile, fee income of $452 million increased 1.3% year over year. Premiums totaled $610 million, up 12.1% from the year-ago quarter.
Total benefits and expenses were $1.5 billion, up 6.7% from the year-ago quarter. As of Dec 31, 2022, VOYA’s assets under management totaled $321 billion, up 22% year over year.
Segmental Update
Wealth Solutions reported adjusted operating earnings of $148 million, which decreased 38.5% year over year. The downside was due to lower investment income and lower fee-based margin, partially offset by a favorable change in DAC/VOBA and other intangibles unlocking and lower administrative expenses. However, Wealth Solutions generated positive full-service net flows of $952 million in the reported quarter, up 207.6% year over year.
Health Solutions adjusted operating earnings amounted to $74 million, which increased 124.4% year over year in the fourth quarter, accounting for the higher underwriting results, partially offset by lower overall investment income and higher net expenses. Total annualized in-force premiums were $2.8 billion, up 10.7% year over year. The increase reflects growth across all product lines, including a 20% increase in Voluntary.
Investment Management posted adjusted operating earnings of $57 million, which plunged 3.4% year over year, attributable to lower investment capital revenues and higher administrative expenses. Total assets under management were $321 billion as of Dec 31, 2022, up 21.8% year over year. Institutional net inflows for the quarter were $345 million.
Corporate incurred an adjusted operating loss of $52 million, narrower than the prior-year quarter’s loss of $54 million, which reflected lower interest expense due to debt extinguishments, partially offset by an unfavorable change in amortization of intangibles.
Full-Year Highlights
Adjusted operating revenue was $6.1 billion, down 5.2% from 2021. Adjusted operating earnings were $7.58 per share, down 9.4% from 2021. Net investment income and fee income for 2022 were $1.8 billion and 1.7 billion, down 20.5% and 1.4%, respectively.
Financial Update
Voya Financial exited 2022 with cash and cash equivalents of $919 million, which decreased 34.4% year over year. Total investments amounted to $39.1 billion, down 14.19% year over year.
Long-term debt in 2022-end declined 19.3% year over year to $2.1 billion. The financial leverage ratio deteriorated 850 basis points year over year to 36.1%. As of Dec 31, 2022, book value per share (excluding AOCI) was $58.14, which increased 13.1% year over year. Voya Financial exited the fourth quarter with more than $0.9 billion in excess capital.
Acquisition Update
On Jan 24, 2023, Voya completed the acquisition of Benefitfocus, Inc., an industry leader in benefits administration technology, which will help accelerate Voya’s workplace-centered strategy.
Capital Deployment
During 2022, Voya utilized $750 million of excess capital to repurchase shares, $360 million to extinguish subordinated debt and $80 million to pay dividends. On Jan 26, 2023, Voya's board of directors declared a common stock dividend of $0.20 per share for the first quarter of 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Voya has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Voya has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.