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Principal Financial (PFG) Q3 Earnings Beat, Revenues Rise Y/Y
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Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2023 operating net income of $1.72 per share beat the Zacks Consensus Estimate by 4.2%. Also, the bottom line increased 7.5% year over year.
Operating revenues increased 1.6% year over year to $3.4 billion due to increased fees and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 2.9%.
Principal Financial witnessed solid performance across most of the segments and improved assets under management (AUM), offset by higher expenses and soft performances in the Life Insurance business and Corporate segment.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Total expenses increased 0.2% year over year to $3 billion due to higher market risk benefit remeasurement loss and operating expenses. The figure matched our estimate.
As of Sep 30, 2023, Principal Financial’s AUM amounted to $651 billion, which is included in assets under administration (AUA) of $1.5 trillion.
Segment Update
Retirement and Income Solution: Revenues increased 5.6% year over year to $1.6 billion because of higher fees and other revenues and net investment income. The figure matched our estimate.
Pre-tax operating earnings increased 48% year over year to $304.7 million, primarily due to higher net revenues and lower operating expenses.
Principal Global Investors: Revenues of $424.6 million were up 4.5% from the prior-year quarter due to higher fees and other revenues and net investment income.
Pre-tax operating earnings increased 7% year over year to $151.6 million due to higher operating revenues and less pass-through expenses, partially offset by higher variable expenses.
Principal International: Revenues decreased 34.8% year over year to $249.6 million in the quarter due to lower premiums and other considerations and net investment income.
Pre-tax operating earnings increased 11% year over year to $70.8 million, driven by higher combined net revenues, partially offset by increased operating expenses. The figure missed our estimate of $78.7 million.
Benefits and Protection: Revenues increased 6% year over year to $1.1 billion owing to higher premiums and other considerations, net investment income, fees and other revenues. The metric matched our estimate.
Pre-tax operating earnings of $169 million decreased 7% year over year. The metric beat our estimate of $147.7 million.
Specialty Benefits: Revenues increased 9% year over year to $816.6 million owing to higher premiums and other considerations and net investment income. The metric beat our estimate of $98.8 million.
Pre-tax operating earnings of $147.8 million decreased 1% year over year. The metric beat our estimate of $98.8 million.
Life Insurance: Revenues decreased 0.5% year over year to $335 million owing to higher fees and other revenues. The metric missed our estimate of $355 million.
Pre-tax operating earnings of $21.2 million decreased 35% year over year due to higher mortality and lower net investment income. The metric missed our estimate of $48.9 million.
Corporate: Pre-tax operating losses of $114.8 million were wider than the $100.8 million loss incurred a year ago. This decrease was due to higher operating expenses. The figure was wider than our estimate of a loss of $109.7 million.
Financial Update
As of Sep 30, 2023, cash and cash equivalents were $4.5 billion, which decreased 5.8% from 2022-end.
At the third-quarter end, long-term debt was $3.9 billion, down 1.6% from 2022-end. As of Sep 30, 2023, book value per share (excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment) was $53.21, up 4.5% from 2022-end.
Dividend and Share Repurchase Update
Principal Financial paid out $156.1 million in dividends and deployed $200.3 million to buy back 2.5 million shares in the third quarter.
The board of directors declared a third-quarter dividend of 67 cents per share, 3% higher than the previous dividend of 65 cents. The dividend will be paid out on Dec 20, 2023, to shareholders of record as of Dec 1.
Zacks Rank
Principal Financial currently carries a Zacks Rank #4 (Sell).
Ameriprise Financial’s (AMP - Free Report) third-quarter 2023 adjusted operating earnings (excluding unlocking) of $7.68 per share handily surpassed the Zacks Consensus Estimate of $7.58. The bottom line reflects a rise of 21% from the year-ago quarter. After considering significant items, net income (GAAP basis) was $872 million or $8.14 per share, down from $1.06 billion or $9.41 per share in the prior-year quarter. Our estimate for the metric was $803.8 million.
On an operating basis, adjusted total net revenues were $3.91 billion, up 10% year over year. The top line missed the Zacks Consensus Estimate of $3.96 billion. On a GAAP basis, net revenues were $3.93 billion, growing 13% year over year. Adjusted operating expenses totaled $2.96 billion, which increased 18% year over year. We had projected the same to be $3.09 billion. Total AUM and AUA increased 12% year over year to $1.23 trillion. The rise reflected strong client net inflows and market appreciation. Our estimate for the metric was $1.28 trillion.
SEI Investments Co.’s (SEIC - Free Report) third-quarter 2023 earnings of 87 cents per share met the Zacks Consensus Estimate. The bottom line reflects a rise of 93% from the prior-year quarter. Results benefited from higher revenues and an increase in the AUM balance. Net income was $115.7 million, up 88% from the year-ago quarter. Our estimate for the metric was $116 million. Total revenues were $476.8 million, up 1% year over year. However, the top line missed the Zacks Consensus Estimate of $482.2 million.
Total expenses were $368.3 million, which declined 12% year over year. The fall was due to lower compensation, benefits and other personnel costs; stock-based compensation costs; consulting, outsourcing and professional fees; facilities, supplies and other costs; and amortization costs. Our estimate for expenses was $367.3 million. Operating income increased significantly year over year to $108.5 million. Our estimate for the metric was $111.5 million.
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter. Net income attributable to BlackRock (on a GAAP basis) was $1.60 billion, jumping 14.1% from the prior-year quarter. We had projected the metric to be $1.24 billion.
Revenues (on a GAAP basis) were $4.52 billion, marginally lagging the Zacks Consensus Estimate of $4.58 billion. However, the top line increased 4.9% year over year. Total expenses were $2.89 billion, up 3.6% year over year. Our estimate for expenses was $3.06 billion. Non-operating income (on a GAAP basis) was $171 million, up 3.6% from the year-ago quarter. Our estimate for non-operating income was $130.9 million. BlackRock’s adjusted operating income was $1.69 billion, up 7% from the prior-year period.
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Principal Financial (PFG) Q3 Earnings Beat, Revenues Rise Y/Y
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2023 operating net income of $1.72 per share beat the Zacks Consensus Estimate by 4.2%. Also, the bottom line increased 7.5% year over year.
Operating revenues increased 1.6% year over year to $3.4 billion due to increased fees and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 2.9%.
Principal Financial witnessed solid performance across most of the segments and improved assets under management (AUM), offset by higher expenses and soft performances in the Life Insurance business and Corporate segment.
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
Total expenses increased 0.2% year over year to $3 billion due to higher market risk benefit remeasurement loss and operating expenses. The figure matched our estimate.
As of Sep 30, 2023, Principal Financial’s AUM amounted to $651 billion, which is included in assets under administration (AUA) of $1.5 trillion.
Segment Update
Retirement and Income Solution: Revenues increased 5.6% year over year to $1.6 billion because of higher fees and other revenues and net investment income. The figure matched our estimate.
Pre-tax operating earnings increased 48% year over year to $304.7 million, primarily due to higher net revenues and lower operating expenses.
Principal Global Investors: Revenues of $424.6 million were up 4.5% from the prior-year quarter due to higher fees and other revenues and net investment income.
Pre-tax operating earnings increased 7% year over year to $151.6 million due to higher operating revenues and less pass-through expenses, partially offset by higher variable expenses.
Principal International: Revenues decreased 34.8% year over year to $249.6 million in the quarter due to lower premiums and other considerations and net investment income.
Pre-tax operating earnings increased 11% year over year to $70.8 million, driven by higher combined net revenues, partially offset by increased operating expenses. The figure missed our estimate of $78.7 million.
Benefits and Protection: Revenues increased 6% year over year to $1.1 billion owing to higher premiums and other considerations, net investment income, fees and other revenues. The metric matched our estimate.
Pre-tax operating earnings of $169 million decreased 7% year over year. The metric beat our estimate of $147.7 million.
Specialty Benefits: Revenues increased 9% year over year to $816.6 million owing to higher premiums and other considerations and net investment income. The metric beat our estimate of $98.8 million.
Pre-tax operating earnings of $147.8 million decreased 1% year over year. The metric beat our estimate of $98.8 million.
Life Insurance: Revenues decreased 0.5% year over year to $335 million owing to higher fees and other revenues. The metric missed our estimate of $355 million.
Pre-tax operating earnings of $21.2 million decreased 35% year over year due to higher mortality and lower net investment income. The metric missed our estimate of $48.9 million.
Corporate: Pre-tax operating losses of $114.8 million were wider than the $100.8 million loss incurred a year ago. This decrease was due to higher operating expenses. The figure was wider than our estimate of a loss of $109.7 million.
Financial Update
As of Sep 30, 2023, cash and cash equivalents were $4.5 billion, which decreased 5.8% from 2022-end.
At the third-quarter end, long-term debt was $3.9 billion, down 1.6% from 2022-end. As of Sep 30, 2023, book value per share (excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment) was $53.21, up 4.5% from 2022-end.
Dividend and Share Repurchase Update
Principal Financial paid out $156.1 million in dividends and deployed $200.3 million to buy back 2.5 million shares in the third quarter.
The board of directors declared a third-quarter dividend of 67 cents per share, 3% higher than the previous dividend of 65 cents. The dividend will be paid out on Dec 20, 2023, to shareholders of record as of Dec 1.
Zacks Rank
Principal Financial currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Ameriprise Financial’s (AMP - Free Report) third-quarter 2023 adjusted operating earnings (excluding unlocking) of $7.68 per share handily surpassed the Zacks Consensus Estimate of $7.58. The bottom line reflects a rise of 21% from the year-ago quarter. After considering significant items, net income (GAAP basis) was $872 million or $8.14 per share, down from $1.06 billion or $9.41 per share in the prior-year quarter. Our estimate for the metric was $803.8 million.
On an operating basis, adjusted total net revenues were $3.91 billion, up 10% year over year. The top line missed the Zacks Consensus Estimate of $3.96 billion. On a GAAP basis, net revenues were $3.93 billion, growing 13% year over year. Adjusted operating expenses totaled $2.96 billion, which increased 18% year over year. We had projected the same to be $3.09 billion. Total AUM and AUA increased 12% year over year to $1.23 trillion. The rise reflected strong client net inflows and market appreciation. Our estimate for the metric was $1.28 trillion.
SEI Investments Co.’s (SEIC - Free Report) third-quarter 2023 earnings of 87 cents per share met the Zacks Consensus Estimate. The bottom line reflects a rise of 93% from the prior-year quarter. Results benefited from higher revenues and an increase in the AUM balance. Net income was $115.7 million, up 88% from the year-ago quarter. Our estimate for the metric was $116 million. Total revenues were $476.8 million, up 1% year over year. However, the top line missed the Zacks Consensus Estimate of $482.2 million.
Total expenses were $368.3 million, which declined 12% year over year. The fall was due to lower compensation, benefits and other personnel costs; stock-based compensation costs; consulting, outsourcing and professional fees; facilities, supplies and other costs; and amortization costs. Our estimate for expenses was $367.3 million. Operating income increased significantly year over year to $108.5 million. Our estimate for the metric was $111.5 million.
BlackRock, Inc.’s (BLK - Free Report) third-quarter 2023 adjusted earnings of $10.91 per share handily surpassed the Zacks Consensus Estimate of $8.52. Also, the figure reflects an increase of 14.2% from the year-ago quarter. Net income attributable to BlackRock (on a GAAP basis) was $1.60 billion, jumping 14.1% from the prior-year quarter. We had projected the metric to be $1.24 billion.
Revenues (on a GAAP basis) were $4.52 billion, marginally lagging the Zacks Consensus Estimate of $4.58 billion. However, the top line increased 4.9% year over year. Total expenses were $2.89 billion, up 3.6% year over year. Our estimate for expenses was $3.06 billion. Non-operating income (on a GAAP basis) was $171 million, up 3.6% from the year-ago quarter. Our estimate for non-operating income was $130.9 million. BlackRock’s adjusted operating income was $1.69 billion, up 7% from the prior-year period.