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Principal Financial (PFG) Q4 Earnings Beat, Revenues Up Y/Y

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Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2016 operating net income of $1.27 per share beat the Zacks Consensus Estimate of $1.15 by 10.4%. The bottom line also improved 25% year over year.

 

 

The company’s investment performance remained strong. Moreover, the company expanded its solution set as well as strengthened relationships with customers and distributors in the quarter. The company also displayed a balanced approach to capital management.

Including net realized capital losses of 1 cent and other unfavorable adjustment of 17 cents, net income available to common stockholders was $1.09 per share, up 26% year over year.

Behind the Headlines

Operating revenues in the quarter increased 24.3% year over year to $3.6 billion.

Total expenses rose 24% year over year to $3.1 billion. This was primarily due to the increase in benefits, claims and settlement expenses, commission expenses, and compensation and other.

Principal Financial’s Asset Under Management (AUM) as of Dec 31, 2016 was a record $591.6 billion. The metric increased 12.2% from Dec 31, 2015.

As of Dec 31, 2016, book value per share was $37.90, up 8.3% year over year.

2016 Highlights

Operating income came in at $4.55 per share, up 6.8% from 2015.

Operating revenues were $12.4 billion, up 2.1% from 2015.

Principal Financial Group Inc Price, Consensus and EPS Surprise

Principal Financial Group Inc Price, Consensus and EPS Surprise | Principal Financial Group Inc Quote

Segment Update

Retirement and Income Solution: Revenues surged almost 43% year over year to about $2 billion.

Operating earnings increased 13.3% year over year to $211.5 million.

Principal Global Investors: Revenues of $380.1 million climbed nearly 9.4% from the prior-year quarter.

Operating earnings rose 31.1% year over year to $133.7 million owing to higher management fees on increased AUM, higher performance fees and disciplined expense management.

Principal International: Revenues dipped 1.1% year over year to $312.3 million in the quarter.

Operating earnings declined 2% year over year to $66 million.

US Insurance Solution: Revenues increased 6.9% year over year to $928 million.

Operating earnings were $106.9 million, up 23.4% year over year.

Corporate: Revenues of $5.3 million compared favorably with ($18.3) million in the year-ago quarter.

Operating loss of $53.3 million was narrower than a loss of $54.8 million in the year-earlier quarter.

Dividend and Share Repurchase Update

Principal Financial paid a quarterly dividend of $465 million of common stock dividends. Also, the company bought back 6.2 million shares worth $257 million during 2016.

Furthermore, the company lowered debt by $94 million and invested $40 million for increased ownership in investment boutiques.

Zacks Rank

Principal Financial presently 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 Stocks

Among the other players from the finance sector that have reported their fourth-quarter earnings so far, the bottom line at Progressive Corp. (PGR - Free Report) , The Travelers Companies Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.

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