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Is a Beat in the Cards for Principal Financial This Earnings Season?

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Key Takeaways

  • PFG's Q3 earnings are expected to be $2.18 per share, up 23.8% year over year.
  • Revenues projected to climb 7.8% to $4.07 billion on stronger premiums and fee income.
  • Higher AUM, investment yields, and favorable underwriting are likely to boost results.

Principal Financial Group, Inc. (PFG - Free Report) is expected to register an improvement in its top and bottom lines when it reports third-quarter 2025 results on Oct. 27, after the closing bell.

The Zacks Consensus Estimate for PFG’s third-quarter revenues is pegged at $4.07 billion, indicating an increase of 7.8% from the year-ago reported figure.

The consensus estimate for earnings is pegged at $2.18 per share. The Zacks Consensus Estimate for PFG’s third-quarter earnings has moved up 0.4% in the past 30 days. The estimate suggests a year-over-year increase of 23.8%.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Principal Financial this time. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.

Earnings ESP: Principal Financial has an Earnings ESP of +1.76% at present. This is because the Most Accurate Estimate of $1.22 is pegged higher than the Zacks Consensus Estimate of $2.18. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Principal Financial currently carries a Zacks Rank #3.

Factors at Play

Principal Financial’s third-quarter results are likely to reflect a rise in strong PRT sales, more favorable underwriting experience, as well as growth in the business. 

Operating revenues are likely to have increased owing to higher premiums & other considerations, as well as higher fees & other revenues in Retirement and Income Solutions, Principal Asset Management and Benefits and Protection. 

Higher management fee revenues as a result of increased average AUM and higher performance fee revenues, primarily in the real estate business, are likely to have benefited the Investment Management.

Favorable relative market performance on required regulatory investments is expected to have benefited International Pension operations.
Investment income is expected to have benefited from higher average invested assets and yields in fixed maturities for U.S. operations and favorable market performance on required regulatory investments in Latin America. The lower income associated with derivatives in fair value hedges for U.S. operations is likely to have offset the upside. We expect net investment income to be $1.2 billion in the third quarter of 2025. 

Assets under management are likely to have benefited from positive market performance and the beneficial impact of exchange rates. 
Expenses are likely to have increased due to higher benefits, claims and settlement expenses. We expect total expenses to be $3.6 billion.

Other Stocks to Consider

Here are some insurance stocks you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:

Marsh & McLennan Companies, Inc. (MMC - Free Report) has an Earnings ESP of +0.73% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $1.97 per share, indicating a year-over-year increase of 5.3%. 
MMC’s earnings beat estimates in each of the last four reported quarters.

Aon plc. (AON - Free Report) has an Earnings ESP of +0.60% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $2.89 per share, implying an increase of 6.2% from the year-ago reported figure.

AON’s earnings beat estimates in three of the last four quarters while missing in one.

Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +2.31% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $2.14, indicating a year-over-year increase of 7.5%. 

ACGL’s earnings beat estimates in each of the last four reported quarters.

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