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Principal Financial (PFG) Q1 Earnings Miss, AUM Rises Y/Y
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Principal Financial Group, Inc.’s (PFG - Free Report) first-quarter 2024 operating net income of $1.65 per share missed the Zacks Consensus Estimate by 5.2%. Also, the bottom line increased 11.5% year over year.
Principal Financial witnessed higher revenues and operating earnings across most of the segments and improved assets under management (AUM), offset by higher expenses and soft performance in the Principal International segment.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Operating revenues increased 11% year over year to $3.8 billion due to increased premiums and other considerations, fees and other revenues and net investment income.
Total expenses increased 13% year over year to $3.4 billion due to higher benefits, claims and settlement expenses, dividends to policyholders and operating expenses. The figure was higher than our estimate of $2.7 billion.
Principal Financial’s AUM as of Mar 31, 2024, amounted to $708.5 billion, up 7.3% year over year.
Segment Update
Retirement and Income Solution: Revenues increased 19.6% year over year to about $1.9 billion because of higher premiums and other considerations, fees and other revenues and net investment income. The figure was higher than our estimate of $1.8 billion.
Pre-tax operating earnings increased 5% year over year to $262.2 million, primarily due to higher net revenues, partially offset by higher operating expenses. The figure was lower than our estimate of $670.4 million.
Principal Global Investors: Revenues of $404.8 million were up 3% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure was higher than our estimate of $324 million.
Pre-tax operating earnings increased 4% year over year to $113.9 million due to higher operating revenues and less pass-through expenses, partially offset by higher operating expenses. The figure was higher than our estimate of $97.4 million.
Principal International: Revenues decreased 15.9% year over year to $256.7 million in the quarter due to lower premiums and other considerations and net investment income. The figure was lower than our estimate of $294.2 million.
Pre-tax operating earnings decreased 7% year over year to $73.2 million, primarily due to lower combined net revenues. The figure was lower than our estimate of $84.2 million.
Benefits and Protection: Revenues rose 7.5% year over year to $1.2 billion, owing to higher premiums and other considerations, fees and other revenues and net investment income. The figure matched our estimate.
Pre-Tax operating earnings of $111.8 million climbed 12.5% year over year. The metric missed our estimate of $151.9 million.
Specialty Benefits: Revenues increased 8.4% year over year to $848.3 million, owing to higher premiums and other considerations and net investment income. The metric missed our estimate of $857.5 million.
Pre-tax operating earnings of $102 million jumped 25% year over year. The rise was due to growth in the business and lower incurred loss ratio. The metric missed our estimate of $104 million.
Life Insurance: Revenues rose 5.1% year over year to $337.8 million, owing to higher fees and other revenues and net investment income. The metric beat our estimate of $319.5 million.
Pre-tax operating earnings of $9.8 million plunged 44% year over year, primarily due to a GAAP-only regulatory closed block dividend adjustment. The metric missed our estimate of $47.9 million.
Corporate: Pre-tax operating losses of $88.9 million were narrower than the loss of $96.1 million incurred a year ago. The figure was narrower than our estimate of a loss of $89.2 million.
Financial Update
As of Mar 31, 2024, cash and cash equivalents were $4.2 billion, down 10.2% year over year.
At the end of the first quarter, long-term debt was $3.9 billion, down 16.1% year over year.
As of Mar 31, 2024, book value per share (excluding AOCI other than foreign currency translation adjustment) was $53.79, up 3.8% year over year.
Dividend and Share Repurchase Update
Principal Financial returned $362 million of capital to shareholders, which included $200 million of share repurchases and $162 million of dividends.
The board of directors raised second-quarter dividend by 2.85% to 71 cents. The dividend will be paid out on Jun 27, 2024, to shareholders of record as of Jun 3, 2024.
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2024 earnings of 99 cents per share surpassed the Zacks Consensus Estimate of 97 cents. The bottom line reflects a rise of 25% from the prior-year quarter. Net income was $131.4 million, up 23% from the year-ago quarter. Our estimate for the metric was $117.8 million. Total revenues were $511.6 million, up 9% year over year. Also, the top line beat the Zacks Consensus Estimate of $505.4 million.
Total expenses were $385.7 million, rising 5% year over year. Our estimate for expenses was $382.7 million. Operating income increased 24% year over year to $125.9 million. Our estimate for the metric was $107.1 million. As of Mar 31, 2024, AUM was $443.6 billion, reflecting a rise of 8% from the prior-year quarter. Client assets under administration (AUA) were $983.3 billion, up 16% year over year. Client AUA did not include $11.0 billion related to Funds of Funds assets reported as of Mar 31, 2024.
Ameriprise Financial, Inc.’s (AMP - Free Report) first-quarter 2024 adjusted operating earnings of $8.39 per share handily surpassed the Zacks Consensus Estimate of $8.10. The bottom line reflects a rise of 16% from the year-ago quarter. Results were aided by revenue growth, along with higher AUM and AUA balances. However, an increase in expenses acted as a headwind.
Adjusted operating total net revenues were $4.10 billion, up 11% year over year. The top line lagged the Zacks Consensus Estimate of $4.16 billion. Total GAAP net revenues were $4.15 billion, growing 11% year over year. Adjusted operating expenses totaled $3.02 billion, which increased 11% year over year. We had projected adjusted expenses of $2.88 billion. Total AUM and AUA increased 15% year over year to $1.42 trillion. The rise reflected strong client net inflows and market appreciation. Our estimate for the metric was $1.33 trillion.
Invesco Ltd.’s (IVZ - Free Report) first-quarter 2024 adjusted earnings of 33 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line declined 13.2% from the prior-year quarter. However, a full day’s trading session will depict a clearer picture. However, an increase in the AUM balance on decent inflows was positive.
On a GAAP basis, net income attributable to common shareholders was $141.5 million or 31 cents per share compared with $145 million or 32 cents per share a year ago. Our estimate for the metric was $137.4 million. Adjusted net revenues were $1.05 billion, falling 2.1% year over year. The top line lagged the Zacks Consensus Estimate of $1.08 billion. Adjusted operating expenses were $756.7 million, up 1% on a year-over-year basis. We expected the metric to be $779.3 million.
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Principal Financial (PFG) Q1 Earnings Miss, AUM Rises Y/Y
Principal Financial Group, Inc.’s (PFG - Free Report) first-quarter 2024 operating net income of $1.65 per share missed the Zacks Consensus Estimate by 5.2%. Also, the bottom line increased 11.5% year over year.
Principal Financial witnessed higher revenues and operating earnings across most of the segments and improved assets under management (AUM), offset by higher expenses and soft performance in the Principal International 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
Operating revenues increased 11% year over year to $3.8 billion due to increased premiums and other considerations, fees and other revenues and net investment income.
Total expenses increased 13% year over year to $3.4 billion due to higher benefits, claims and settlement expenses, dividends to policyholders and operating expenses. The figure was higher than our estimate of $2.7 billion.
Principal Financial’s AUM as of Mar 31, 2024, amounted to $708.5 billion, up 7.3% year over year.
Segment Update
Retirement and Income Solution: Revenues increased 19.6% year over year to about $1.9 billion because of higher premiums and other considerations, fees and other revenues and net investment income. The figure was higher than our estimate of $1.8 billion.
Pre-tax operating earnings increased 5% year over year to $262.2 million, primarily due to higher net revenues, partially offset by higher operating expenses. The figure was lower than our estimate of $670.4 million.
Principal Global Investors: Revenues of $404.8 million were up 3% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure was higher than our estimate of $324 million.
Pre-tax operating earnings increased 4% year over year to $113.9 million due to higher operating revenues and less pass-through expenses, partially offset by higher operating expenses. The figure was higher than our estimate of $97.4 million.
Principal International: Revenues decreased 15.9% year over year to $256.7 million in the quarter due to lower premiums and other considerations and net investment income. The figure was lower than our estimate of $294.2 million.
Pre-tax operating earnings decreased 7% year over year to $73.2 million, primarily due to lower combined net revenues. The figure was lower than our estimate of $84.2 million.
Benefits and Protection: Revenues rose 7.5% year over year to $1.2 billion, owing to higher premiums and other considerations, fees and other revenues and net investment income. The figure matched our estimate.
Pre-Tax operating earnings of $111.8 million climbed 12.5% year over year. The metric missed our estimate of $151.9 million.
Specialty Benefits: Revenues increased 8.4% year over year to $848.3 million, owing to higher premiums and other considerations and net investment income. The metric missed our estimate of $857.5 million.
Pre-tax operating earnings of $102 million jumped 25% year over year. The rise was due to growth in the business and lower incurred loss ratio. The metric missed our estimate of $104 million.
Life Insurance: Revenues rose 5.1% year over year to $337.8 million, owing to higher fees and other revenues and net investment income. The metric beat our estimate of $319.5 million.
Pre-tax operating earnings of $9.8 million plunged 44% year over year, primarily due to a GAAP-only regulatory closed block dividend adjustment. The metric missed our estimate of $47.9 million.
Corporate: Pre-tax operating losses of $88.9 million were narrower than the loss of $96.1 million incurred a year ago. The figure was narrower than our estimate of a loss of $89.2 million.
Financial Update
As of Mar 31, 2024, cash and cash equivalents were $4.2 billion, down 10.2% year over year.
At the end of the first quarter, long-term debt was $3.9 billion, down 16.1% year over year.
As of Mar 31, 2024, book value per share (excluding AOCI other than foreign currency translation adjustment) was $53.79, up 3.8% year over year.
Dividend and Share Repurchase Update
Principal Financial returned $362 million of capital to shareholders, which included $200 million of share repurchases and $162 million of dividends.
The board of directors raised second-quarter dividend by 2.85% to 71 cents. The dividend will be paid out on Jun 27, 2024, to shareholders of record as of Jun 3, 2024.
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
SEI Investments Co.’s (SEIC - Free Report) first-quarter 2024 earnings of 99 cents per share surpassed the Zacks Consensus Estimate of 97 cents. The bottom line reflects a rise of 25% from the prior-year quarter. Net income was $131.4 million, up 23% from the year-ago quarter. Our estimate for the metric was $117.8 million. Total revenues were $511.6 million, up 9% year over year. Also, the top line beat the Zacks Consensus Estimate of $505.4 million.
Total expenses were $385.7 million, rising 5% year over year. Our estimate for expenses was $382.7 million. Operating income increased 24% year over year to $125.9 million. Our estimate for the metric was $107.1 million. As of Mar 31, 2024, AUM was $443.6 billion, reflecting a rise of 8% from the prior-year quarter. Client assets under administration (AUA) were $983.3 billion, up 16% year over year. Client AUA did not include $11.0 billion related to Funds of Funds assets reported as of Mar 31, 2024.
Ameriprise Financial, Inc.’s (AMP - Free Report) first-quarter 2024 adjusted operating earnings of $8.39 per share handily surpassed the Zacks Consensus Estimate of $8.10. The bottom line reflects a rise of 16% from the year-ago quarter. Results were aided by revenue growth, along with higher AUM and AUA balances. However, an increase in expenses acted as a headwind.
Adjusted operating total net revenues were $4.10 billion, up 11% year over year. The top line lagged the Zacks Consensus Estimate of $4.16 billion. Total GAAP net revenues were $4.15 billion, growing 11% year over year. Adjusted operating expenses totaled $3.02 billion, which increased 11% year over year. We had projected adjusted expenses of $2.88 billion. Total AUM and AUA increased 15% year over year to $1.42 trillion. The rise reflected strong client net inflows and market appreciation. Our estimate for the metric was $1.33 trillion.
Invesco Ltd.’s (IVZ - Free Report) first-quarter 2024 adjusted earnings of 33 cents per share lagged the Zacks Consensus Estimate of 40 cents. The bottom line declined 13.2% from the prior-year quarter. However, a full day’s trading session will depict a clearer picture. However, an increase in the AUM balance on decent inflows was positive.
On a GAAP basis, net income attributable to common shareholders was $141.5 million or 31 cents per share compared with $145 million or 32 cents per share a year ago. Our estimate for the metric was $137.4 million. Adjusted net revenues were $1.05 billion, falling 2.1% year over year. The top line lagged the Zacks Consensus Estimate of $1.08 billion. Adjusted operating expenses were $756.7 million, up 1% on a year-over-year basis. We expected the metric to be $779.3 million.