We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Principal Financial Q3 Earnings Miss on Higher Costs, Dividend Raised
Read MoreHide Full Article
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2024 operating net income of $1.76 per share missed the Zacks Consensus Estimate by 12.4%. The bottom line increased 2.3% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Operating revenues increased 5.5% year over year to $3.6 billion due to increased fees and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 6.3%.
Principal Financial witnessed solid performance across the Retirement and Income Solution and Principal International segments and improved assets under management (AUM) and mixed performances in the other segments, offset by higher expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Total expenses increased 10.4% year over year to $3.3 billion due to higher operating expenses, benefits, claims and settlement expenses and market risk benefit remeasurement (gain) loss. The figure was lower than our estimate of $3.4 billion.
As of Sept. 30, 2024, Principal Financial’s AUM amounted to $741 billion, which is included in assets under administration of $1.7 trillion.
Segment Update
Retirement and Income Solution: Revenues increased 2.1% year over year to $1.7 billion because of higher fees and other revenues and net investment income. The figure missed our estimate of $1.8 billion.
Pre-tax operating earnings increased 19% year over year to $246.1 million. The figure missed our estimate of $711 million.
Principal Global Investors: Revenues of $431 million were up 1.5% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure beat our estimate of $425.7 million.
Pre-tax operating earnings decreased 2% year over year to $147.96 million due to muted growth in operating revenues and less pass-through expenses due to strong performance fees in the prior-year quarter. The figure missed our estimate of $150.5 million.
Principal International: Revenues increased 26% year over year to $314.8 million in the quarter due to higher premiums and other considerations and net investment income. The figure missed our estimate of $363.2 million. Pre-tax operating earnings increased 71% year over year to $120.8 million. The figure missed our estimate of $175.5 million.
Benefits and Protection: Revenues increased 5.4% year over year to $1.2 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 $64.6 million decreased 62% year over year. The metric missed our estimate of $153.3 million.
Specialty Benefits: Revenues increased 6.4% year over year to $868.9 million owing to higher premiums and other considerations and net investment income. The metric missed our estimate of $894.6 million.
Pre-tax operating earnings of $101.7 million decreased 31% year over year. The metric missed our estimate of $163.7 million.
Life Insurance: Revenues increased 2.9% year over year to $344.8 million owing to higher fees and other revenues and net investment income. The metric beat our estimate of $317.8 million.
Pre-tax operating losses were $37.3 million against the year-ago quarter’s earnings of $21.2 million. The figure was wider than our estimate of a loss of $10.4 million.
Corporate: Pre-tax operating losses of $79.4 million were narrower than the loss of $114.8 million incurred a year ago. This decrease was due to lower operating expenses. The figure was narrower than our estimate of a loss of $102.3 million.
Financial Update
As of Sept. 30, 2024, cash and cash equivalents were $6.2 billion, which increased 31% from 2023-end.
At the third-quarter end, long-term debt was $3.9 billion, which inched up 0.05% from 2023-end. As of Sept. 30, 2024, book value per share (excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment) was $54.36, up 0.9% from 2023-end.
Dividend and Share Repurchase Update
Principal Financial returned $416 million of capital to shareholders, which included $251 million of share repurchases and $165 million of dividends in the third quarter.
The board of directors declared a fourth-quarter dividend of 73 cents per share, 1.3% higher than the previous dividend of 72 cents. The dividend will be paid out on Dec. 18, 2024, to shareholders of record as of Dec. 2.
SEI Investments Company's (SEIC - Free Report) earnings per share (EPS) of $1.19 surpassed the Zacks Consensus Estimate of $1.07. The bottom line reflected a rise of 36.8% from the prior-year quarter's level. Net income was $154.9 million, up 33.9% from the year-ago quarter's level. Our estimate for the metric was $136.5 million. Total revenues were $537.4 million, up 12.7% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $533.2 million.
Total expenses were $393.6 million, up 6.9% year over year. The increase was driven by all the components except consulting, outsourcing and professional fees charges, and depreciation charges. Our estimate for the metric was $393.7 million.
Ameriprise Financial, Inc.’s (AMP - Free Report) third-quarter 2024 adjusted operating earnings of $8.83 per share lagged the Zacks Consensus Estimate of $8.91. The bottom line reflected a rise of 15% from the year-ago quarter's level. Excluding severance expenses, the third-quarter adjusted operating earnings were $9.02 per share. After considering significant items, net income (GAAP basis) was $511 million or $5.00 per share, down from $872 million or $8.14 per share in the prior-year quarter. Our estimate for net income (GAAP basis) was $919.1 million.
Adjusted operating total net revenues were $4.35 billion, up 11% year over year. Also, the top line beat the Zacks Consensus Estimate of $4.31 billion. Total GAAP net revenues were $4.4 billion, up 12% year over year. Adjusted operating expenses totaled $3.3 billion, rising 11%. We had projected adjusted expenses of $3.05 billion.
Invesco Ltd.’s (IVZ - Free Report) third-quarter 2024 adjusted earnings of 44 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 25.7% from the prior-year quarter. Adjusted net revenues were $1.10 billion, up marginally year over year. The top line marginally missed the Zacks Consensus Estimate of $1.11 billion.
Adjusted operating expenses were $755.5 million, down 4.2% on a year-over-year basis. The adjusted operating margin was 31.6%, up from 28.2% a year ago.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Principal Financial Q3 Earnings Miss on Higher Costs, Dividend Raised
Principal Financial Group, Inc.’s (PFG - Free Report) third-quarter 2024 operating net income of $1.76 per share missed the Zacks Consensus Estimate by 12.4%. The bottom line increased 2.3% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Operating revenues increased 5.5% year over year to $3.6 billion due to increased fees and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 6.3%.
Principal Financial witnessed solid performance across the Retirement and Income Solution and Principal International segments and improved assets under management (AUM) and mixed performances in the other segments, offset by higher expenses.
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 10.4% year over year to $3.3 billion due to higher operating expenses, benefits, claims and settlement expenses and market risk benefit remeasurement (gain) loss. The figure was lower than our estimate of $3.4 billion.
As of Sept. 30, 2024, Principal Financial’s AUM amounted to $741 billion, which is included in assets under administration of $1.7 trillion.
Segment Update
Retirement and Income Solution: Revenues increased 2.1% year over year to $1.7 billion because of higher fees and other revenues and net investment income. The figure missed our estimate of $1.8 billion.
Pre-tax operating earnings increased 19% year over year to $246.1 million. The figure missed our estimate of $711 million.
Principal Global Investors: Revenues of $431 million were up 1.5% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure beat our estimate of $425.7 million.
Pre-tax operating earnings decreased 2% year over year to $147.96 million due to muted growth in operating revenues and less pass-through expenses due to strong performance fees in the prior-year quarter. The figure missed our estimate of $150.5 million.
Principal International: Revenues increased 26% year over year to $314.8 million in the quarter due to higher premiums and other considerations and net investment income. The figure missed our estimate of $363.2 million.
Pre-tax operating earnings increased 71% year over year to $120.8 million. The figure missed our estimate of $175.5 million.
Benefits and Protection: Revenues increased 5.4% year over year to $1.2 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 $64.6 million decreased 62% year over year. The metric missed our estimate of $153.3 million.
Specialty Benefits: Revenues increased 6.4% year over year to $868.9 million owing to higher premiums and other considerations and net investment income. The metric missed our estimate of $894.6 million.
Pre-tax operating earnings of $101.7 million decreased 31% year over year. The metric missed our estimate of $163.7 million.
Life Insurance: Revenues increased 2.9% year over year to $344.8 million owing to higher fees and other revenues and net investment income. The metric beat our estimate of $317.8 million.
Pre-tax operating losses were $37.3 million against the year-ago quarter’s earnings of $21.2 million. The figure was wider than our estimate of a loss of $10.4 million.
Corporate: Pre-tax operating losses of $79.4 million were narrower than the loss of $114.8 million incurred a year ago. This decrease was due to lower operating expenses. The figure was narrower than our estimate of a loss of $102.3 million.
Financial Update
As of Sept. 30, 2024, cash and cash equivalents were $6.2 billion, which increased 31% from 2023-end.
At the third-quarter end, long-term debt was $3.9 billion, which inched up 0.05% from 2023-end. As of Sept. 30, 2024, book value per share (excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment) was $54.36, up 0.9% from 2023-end.
Dividend and Share Repurchase Update
Principal Financial returned $416 million of capital to shareholders, which included $251 million of share repurchases and $165 million of dividends in the third quarter.
The board of directors declared a fourth-quarter dividend of 73 cents per share, 1.3% higher than the previous dividend of 72 cents. The dividend will be paid out on Dec. 18, 2024, to shareholders of record as of Dec. 2.
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 Company's (SEIC - Free Report) earnings per share (EPS) of $1.19 surpassed the Zacks Consensus Estimate of $1.07. The bottom line reflected a rise of 36.8% from the prior-year quarter's level. Net income was $154.9 million, up 33.9% from the year-ago quarter's level. Our estimate for the metric was $136.5 million. Total revenues were $537.4 million, up 12.7% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $533.2 million.
Total expenses were $393.6 million, up 6.9% year over year. The increase was driven by all the components except consulting, outsourcing and professional fees charges, and depreciation charges. Our estimate for the metric was $393.7 million.
Ameriprise Financial, Inc.’s (AMP - Free Report) third-quarter 2024 adjusted operating earnings of $8.83 per share lagged the Zacks Consensus Estimate of $8.91. The bottom line reflected a rise of 15% from the year-ago quarter's level. Excluding severance expenses, the third-quarter adjusted operating earnings were $9.02 per share. After considering significant items, net income (GAAP basis) was $511 million or $5.00 per share, down from $872 million or $8.14 per share in the prior-year quarter. Our estimate for net income (GAAP basis) was $919.1 million.
Adjusted operating total net revenues were $4.35 billion, up 11% year over year. Also, the top line beat the Zacks Consensus Estimate of $4.31 billion. Total GAAP net revenues were $4.4 billion, up 12% year over year. Adjusted operating expenses totaled $3.3 billion, rising 11%. We had projected adjusted expenses of $3.05 billion.
Invesco Ltd.’s (IVZ - Free Report) third-quarter 2024 adjusted earnings of 44 cents per share came in line with the Zacks Consensus Estimate. The bottom line increased 25.7% from the prior-year quarter. Adjusted net revenues were $1.10 billion, up marginally year over year. The top line marginally missed the Zacks Consensus Estimate of $1.11 billion.
Adjusted operating expenses were $755.5 million, down 4.2% on a year-over-year basis. The adjusted operating margin was 31.6%, up from 28.2% a year ago.