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Principal Financial (PFG) Q2 Earnings Beat, Increase Y/Y
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Principal Financial Group Inc. (PFG - Free Report) reported second-quarter 2016 operating net income of $1.15 per share that surpassed the Zacks Consensus Estimate of $1.06 by 8.5%. The bottom line also improved 5.5% year over year.
The company’s investment performance remained strong and it also displayed a balanced approach to capital management.
Including net realized capital losses of 5 cents, net income available to common stockholders was $1.10 per share, up 35.8% year over year.
Behind the Headlines
Operating revenues in the quarter decreased 11.3% year over year to $3.0 billion. Also, revenues missed the Zacks Consensus Estimate of $3.5 billion by 14%.
Total expenses were down 12.7% year over year to $2.6 billion. This was primarily due to the decrease in benefits, claims and settlement expenses and dividends to policyholders.
Principal Financial’s Asset Under Management (AUM) as of Jun 30, 2016 was a record $572.7 billion, up 6.1% from Jun 30, 2015.
Book value per share as of Mar 31, 2016 was $36.46, up 14.1% year over year.
Segment Update
Retirement and Investor Services: Revenues decreased 22.6% year over year to $1.5 billion.
Operating earnings were down 10.2% year over year to $194.7 million.
Principal Global Investors: Revenues of $351.3 million increased nearly 4% from the prior-year quarter.
Operating earnings rose 19.3% year over year to $117.5 million owing to an increase in adjusted revenues and improved margins.
Principal International: Revenues declined 2.9% year over year in the quarter to $318.7 million.
Operating earnings declined 3.2% year over year to $69.9 million, mainly due to unfavorable foreign exchange rates.
US Insurance Solution: Revenues increased 5.9% year over year to $908.0 million.
Operating earnings were $103.6 million, up 17.6% year over year, primarily due to growth in business.
Corporate: Revenues were ($17.5) million compared with ($9.0) million in the year-ago quarter.
Operating loss of $54.5 million was wider than a loss of $46.2 million in the year-ago quarter.
Dividend and Share Repurchase Update
Principal Financial paid a quarterly dividend of 39 cents per share on Jun 24, 2016. In addition, the board of directors of Principal Financial declared a dividend of 41 cents for the third quarter. This reflects a 5% increase from the prior payout.
Also, the company bought back 2.5 million shares during the reported quarter and completed the remainder of its 2015 authorization. At the end of the second quarter, the company has $285 million remaining outstanding out of the $400 million share repurchase authorization.
Principal Financial displayed strong capital position with full-year capital deployment target between $800 million and $1.0 billion. During the second quarter the company deployed $255 million of capital, which in turn, created long-term value for shareholders.
Principal Financial presently carries a Zacks Rank #2 (Buy). Among the other players from the finance sector that have reported their second-quarter earnings so far, the bottom line at RLI Corp. (RLI - Free Report) and Progressive Corp. (PGR - Free Report) missed their respective Zacks Consensus Estimates, while Nasdaq, Inc.’s (NDAQ - Free Report) earnings beat the same.
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Principal Financial (PFG) Q2 Earnings Beat, Increase Y/Y
Principal Financial Group Inc. (PFG - Free Report) reported second-quarter 2016 operating net income of $1.15 per share that surpassed the Zacks Consensus Estimate of $1.06 by 8.5%. The bottom line also improved 5.5% year over year.
The company’s investment performance remained strong and it also displayed a balanced approach to capital management.
Including net realized capital losses of 5 cents, net income available to common stockholders was $1.10 per share, up 35.8% year over year.
Behind the Headlines
Operating revenues in the quarter decreased 11.3% year over year to $3.0 billion. Also, revenues missed the Zacks Consensus Estimate of $3.5 billion by 14%.
Total expenses were down 12.7% year over year to $2.6 billion. This was primarily due to the decrease in benefits, claims and settlement expenses and dividends to policyholders.
Principal Financial’s Asset Under Management (AUM) as of Jun 30, 2016 was a record $572.7 billion, up 6.1% from Jun 30, 2015.
Book value per share as of Mar 31, 2016 was $36.46, up 14.1% year over year.
Segment Update
Retirement and Investor Services: Revenues decreased 22.6% year over year to $1.5 billion.
Operating earnings were down 10.2% year over year to $194.7 million.
Principal Global Investors: Revenues of $351.3 million increased nearly 4% from the prior-year quarter.
Operating earnings rose 19.3% year over year to $117.5 million owing to an increase in adjusted revenues and improved margins.
Principal International: Revenues declined 2.9% year over year in the quarter to $318.7 million.
Operating earnings declined 3.2% year over year to $69.9 million, mainly due to unfavorable foreign exchange rates.
US Insurance Solution: Revenues increased 5.9% year over year to $908.0 million.
Operating earnings were $103.6 million, up 17.6% year over year, primarily due to growth in business.
Corporate: Revenues were ($17.5) million compared with ($9.0) million in the year-ago quarter.
Operating loss of $54.5 million was wider than a loss of $46.2 million in the year-ago quarter.
Dividend and Share Repurchase Update
Principal Financial paid a quarterly dividend of 39 cents per share on Jun 24, 2016. In addition, the board of directors of Principal Financial declared a dividend of 41 cents for the third quarter. This reflects a 5% increase from the prior payout.
Also, the company bought back 2.5 million shares during the reported quarter and completed the remainder of its 2015 authorization. At the end of the second quarter, the company has $285 million remaining outstanding out of the $400 million share repurchase authorization.
Principal Financial displayed strong capital position with full-year capital deployment target between $800 million and $1.0 billion. During the second quarter the company deployed $255 million of capital, which in turn, created long-term value for shareholders.
PRINCIPAL FINL Price, Consensus and EPS Surprise
PRINCIPAL FINL Price, Consensus and EPS Surprise | PRINCIPAL FINL Quote
Zacks Rank and Performance of Other Stocks
Principal Financial presently carries a Zacks Rank #2 (Buy). Among the other players from the finance sector that have reported their second-quarter earnings so far, the bottom line at RLI Corp. (RLI - Free Report) and Progressive Corp. (PGR - Free Report) missed their respective Zacks Consensus Estimates, while Nasdaq, Inc.’s (NDAQ - Free Report) earnings beat the same.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>