It has been about a month since the last earnings report for Principal Financial (PFG Quick QuotePFG - Free Report) . Shares have added about 3% in that time frame, outperforming 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 drivers for Principal Financial Group, Inc. before we dive into how investors and analysts have reacted as of late.

Principal Financial Q3 Earnings & Revenues Lag Estimates, Dividend Up

Principal Financial Group, Inc.’s third-quarter 2025 operating net income of $2.10 per share missed the Zacks Consensus Estimate by 3.6%. Also, the bottom line increased 19% year over year. Operating revenues increased 6.2% year over year to $3.8 billion due to increased premiums and other considerations, fees, and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 4.1%.

Principal Financial witnessed solid performance across the Retirement and Income Solution, Investment Management, Specialty Benefits segments and improved assets under management (AUM) and mixed performances in the other segments, offset by higher expenses.

Behind the Headlines

Total expenses increased 3.8% year over year to $3.4 billion due to higher benefits, claims and settlement expenses, dividends to policyholders and operating expenses. The figure was lower than our estimate of $3.6 billion. As of Sept. 30, 2025, Principal Financial’s AUM amounted to $784.3 billion, which included $0.4 billion of net cash flow and assets under administration of $1.8 trillion. AUM improved 10.1% from 2024-end.

Segment Update

Retirement and Income Solution: Revenues increased 11.8% year over year to $1.9 billion because of higher premiums and other considerations, fees, and other revenues and net investment income. The figure beat our estimate of $1.8 billion. Pre-tax operating earnings increased 26% year over year to $310.3 million due to higher net revenue and disciplined expense management. The figure missed our estimate of $319 million.

Investment Management: Revenues rose 3.7% year over year to $483.9 million in the quarter due to higher fees and other revenues. The figure was higher than our estimate of $482.4 million. Pre-tax operating earnings increased 9% year over year to $173.5 million, primarily driven by higher operating revenues less pass-through expenses and disciplined expense management. The figure was higher than our estimate of $157.1 million.

International Pension: Revenues decreased 10.5% year over year to $248 million, owing to lower premiums and other considerations, and net investment income. The figure was higher than our estimate of $245.4 million. Pre-Tax operating earnings of $101.2 million declined 8% year over year. The metric beat our estimate of $76.4 million.

Specialty Benefits: Revenues increased 3.2% year over year to $896.5 million, owing to higher premiums and other considerations, fees and other revenues and net investment income. The metric missed our estimate of $939.2 million.
Pre-tax operating earnings of $155.5 million increased 53% year over year due to more favorable underwriting experience, along with growth in the business. The metric missed our estimate of $205.3 million.

Life Insurance: Revenues increased 5.6% year over year to $364.2 million owing to higher premiums and other considerations, fees and other revenues and net investment income. The metric missed our estimate of $422.9 million.
Pre-tax operating losses were $69 million, which was wider than the year-ago quarter’s loss of $37.3 million due to less favorable mortality. The figure was against our estimate of earnings of $107.3 million. 

Corporate: Pre-tax operating losses of $91.6 million were wider than the loss of $79.4 million incurred a year ago. This increase was primarily due to lower interest income and higher operating expenses. The figure was wider than our estimate of a loss of $69.8 million.

Financial Update

As of Sept. 30, 2025, cash and cash equivalents were $5.1 billion, which increased 22% from 2024-end. At the third-quarter end, long-term debt was $3.9 billion, which declined 0.7% from the 2024-end. As of Sept. 30, 2025, book value per share (excluding cumulative change in fair value of funds withheld, embedded derivative, and AOCI other than foreign currency translation adjustment) was $55.93, up 4.2% from 2024-end.

Dividend and Share Repurchase Update

Principal Financial returned $398 million of capital to shareholders, which included $225 million of share repurchases and $173 million of dividends in the third quarter. The board of directors declared a fourth-quarter dividend of 79 cents per share, an 8% increase from the fourth quarter of 2024. The dividend will be paid out on Dec. 19, 2025, to shareholders of record as of Dec. 3.

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 poor Growth Score of F, 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 this investment strategy.

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

Outlook

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