It has been about a month since the last earnings report for Principal Financial (PFG Quick QuotePFG - Free Report) . Shares have added about 0.5% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Principal Financial due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Principal Financial Group, Inc. before we dive into how investors and analysts have reacted as of late.

Principal Financial Q2 Earnings Beat, Revenues Miss, Dividend Raised

Principal Financial Group, Inc.’s second-quarter 2025 operating net income of $2.16 per share beat the Zacks Consensus Estimate by 9%. Moreover, the bottom line increased 33% year over year. Operating revenues declined 9.4% year over year to $3.6 billion due to decreased premiums and other considerations. The metric missed the Zacks Consensus Estimate by 7.8%.

Principal Financial witnessed higher revenues across Investment Management, Specialty Benefits, and Life Insurance segments and improved asset under management (AUM). Higher operating earnings across most of the segments and lower expenses also added to the upside.

Behind the Headlines

Total expenses decreased 18% year over year to $3.2 billion due to lower benefits, claims, and settlement expenses, dividends to policyholders, and operating expenses. The figure was lower than our estimate of $4.3 billion.
As of June 30, 2025, Principal Financial’s AUM amounted to $753 billion, up 7.6% year over year. AUM is included in assets under administration (AUA) of $1.7 trillion.

Segment Update

Retirement and Income Solution: Revenues decreased 21.7% year over year to $1.7 billion because of lower premiums and other considerations and fees, and other revenues. The figure missed our estimate of $2.2 billion. Pre-tax operating earnings increased 9% year over year to $292.1 million, primarily due to higher net revenue and margin expansion while investing in the business. The figure lagged our estimate of $327 million.

Investment Management: Revenues rose 5.2% year over year to $467.2 million in the quarter due to higher fees and other revenues. The figure was higher than our estimate of $454.4 million. Pre-tax operating earnings increased 18.2% year over year to $157.9 million, primarily driven by higher operating revenues less passthrough expenses and margin expansion. The figure was higher than our estimate of $143.1 million.

International Pension: Revenues decreased 1.7% year over year to $240.8 million, owing to lower premiums and other considerations and fees and other revenues. The figure was lower than our estimate of $243.3 million. Pre-Tax operating earnings of $78.5 million climbed 41% year over year, primarily due to higher net revenues. The metric beat our estimate of $68 million.

Specialty Benefits: Revenues increased 4% year over year to $892.2 million, owing to higher premiums and other considerations and net investment income. The metric beat our estimate of $863.3 million. Pre-tax operating earnings of $127.6 million jumped 17% year over year. The rise was due to growth in the business and a more favorable underwriting experience. The metric beat our estimate of $126 million.

Life Insurance: Revenues increased 7.6% year over year to $354.2 million due to lower premiums and other considerations, fees, and other revenues and net investment income. The metric beat our estimate of $205.8 million. Pre-tax operating earnings of $20 million decreased 15% year over year, due to higher claims severity. The metric missed our estimate of $41.5 million.

Corporate: The operating loss of $81.2 million was narrower than the $103.4 million loss incurred a year ago. This decrease was due to higher net investment income and lower operating expenses. The figure was wider  than our estimate of a loss of $87.8 million.

Financial Update

As of June 30, 2025, cash and cash equivalents were $3.6 billion, down 13.1% from the 2024-end. At the second-quarter end, long-term debt was $3.9 billion, which decreased 0.8% from 2024-end. As of June 30, 2025, book value per share (excluding AOCI other than foreign currency translation adjustment) was $54.97, which increased 2.4% from the end of 2024.

Dividend and Share Repurchase Update

Principal Financial returned $320 million to shareholders, comprising $150 million in share repurchases and $170 million in dividends. The board of directors declared a third-quarter dividend of 78 cents per share, representing an 8% increase from the third quarter of 2024. The dividend will be paid out on Sept. 26, 2025, to shareholders of record as of Sept. 4.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Principal Financial has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Principal Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.