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Principal Financial Q4 Earnings Miss, Revenues & Premiums Rise Y/Y
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Key Takeaways
PFG posted Q4 operating EPS of $2.19, missing estimates, but marking a 13% year-over-year increase.
Revenue rose 9.2% on strength across Retirement, Investment Management, Specialty Benefits and Life.
PFG returned $1.5B to shareholders in 2025 and raised its quarterly dividend by 7% to 80 cents.
Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2025 operating net income of $2.19 per share missed the Zacks Consensus Estimate by 1.8%. The bottom line increased 13% year over year.
Total revenues jumped 9.2% year over year to $4.4 billion due to increased premiums and other considerations, fees, and other revenues and net investment income.
Principal Financial witnessed higher revenues across Retirement and Income Solution, Investment Management, Specialty Benefits, and Life Insurance segments, offset by higher expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Total expenses increased 8.2% year over year to $3.9 billion due to higher benefits, claims and settlement expenses and operating expenses.
As of Dec. 31, 2025, Principal Financial’s assets under management amounted to $781 billion, which is included in the assets under administration of $1.8 trillion.
Segment Update
Retirement and Income Solution: Revenues increased 15.6% year over year to $2.5 billion because of higher premiums and other considerations, fees and other revenues, and net investment income.
Pre-tax operating earnings increased 7% year over year to $299.5 million, primarily due to higher net revenues and disciplined expense management.
Investment Management: Revenues of $482.7 million were up 1.7% from the prior-year quarter due to higher fees and other revenues and net investment income.
Pre-tax operating earnings increased 2% year over year to $166.7 million. The increase was primarily due to higher operating revenues less pass-through expenses. Operating margin remains unchanged year over year to 38.3%.
International Pension: Revenues decreased 9.6% year over year to $216.6 million, owing to lower premiums and other considerations, fees and other revenues, and net investment income.
Pre-Tax operating earnings of $64.9 million increased 25% year over year. The increase was due to higher net revenues and disciplined expense management.
Specialty Benefits: Revenues increased 2.8% year over year to $898.2 million, owing to higher premiums and other considerations as well as net investment income.
Pre-tax operating earnings of $142.1 million decreased 3% year over year. The decrease was primarily due to the favorable one-time model refinement impact in the fourth quarter of 2024.
Life Insurance: Revenues increased 5.1% year over year to $346.1 million, owing to higher premiums and other considerations, fees and other revenues, and net investment income.
Pre-tax operating earnings of $27.5 million surged more than threefold year over year. The increase was driven by growth in the business, expense management discipline, and improved mortality experience.
Corporate: Pre-tax operating losses of $102.8 million were narrower than a loss of $103.9 million incurred a year ago.
Financial Update
As of Dec. 31, 2025, cash and cash equivalents were $4.4 billion, which increased 5.2% from 2024-end.
At the fourth-quarter end, long-term debt was $3.9 billion, which declined 0.7% from 2024-end. As of Dec. 31, 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 $57.25, up 6.6% from 2024-end.
Dividend and Share Repurchase Update
Principal Financial returned $1.5 billion of capital to shareholders for 2025, including $0.9 billion of share repurchases and $0.7 billion of dividends.
The board of directors raised the first-quarter dividend by 7% to 80 cents per share. The dividend will be payable on March 27, 2026, to shareholders of record as of March 11.
Full-Year Highlights
For 2025, Principal Financial reported an operating net income of $8.27 per share, which missed the Zacks Consensus Estimate by 0.3%. However, it increased 19% year over year.
Total operating revenues of $15.93 billion increased 2% year over year.
2026 Guidance
Principal Financial expects 9-12% annual non-GAAP operating earnings per diluted share growth.
PFG estimates 75-85% free capital flow conversion.
It expects 15-17% non-GAAP return on equity.
The insurer projects $1.5-$1.8 billion capital deployment, which includes $0.8-$1.1 billion of share repurchases and a 40% dividend ratio.
CNA Financial Corporation (CNA - Free Report) reported fourth-quarter 2025 core earnings of $1.16 per share, which missed the Zacks Consensus Estimate by 3.3%. The bottom line, however, decreased 7.2% year over year. Total operating revenues of CNA Financial were $3.4 billion, up 3.8% year over year due to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 1.2%.
Net written premiums of Property & Casualty Operations increased 2% year over year to $2.8 billion. The new business was flat. Net investment income rose 1.4% year over year to $653 million. Our estimate for net investment was $721.2 million. The Zacks Consensus Estimate was pegged at $721 million.
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2025 core income of $11.13 per share, which beat the Zacks Consensus Estimate by 32% and improved 22% year over year. Travelers’ total revenues increased 3.2% from the year-ago quarter to $12.4 billion, primarily driven by higher premiums, net investment income, and other revenues. The top line beat the Zacks Consensus Estimate by 0.08%.
Net written premiums increased 1% year over year to a record $10.8 billion. Net investment income increased 10.3% year over year to $1 billion. The figure matched the Zacks Consensus Estimate. Travelers witnessed an underwriting gain of $1.7 billion, up 21.7% year over year. The consolidated underlying combined ratio of 82.2 improved 180 bps year over year.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2025 operating earnings of 94 cents per share, which beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. This can be attributed to the poor performance of the Property Segment. Our estimate was $505.2 million. Net investment income increased 9.2% year over year to $42.3 million. The Zacks Consensus Estimate was $42.9 million, while our estimate for the metric was pegged at $44.5 million. The investment portfolio’s total return was 1.5% in the quarter.
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Principal Financial Q4 Earnings Miss, Revenues & Premiums Rise Y/Y
Key Takeaways
Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2025 operating net income of $2.19 per share missed the Zacks Consensus Estimate by 1.8%. The bottom line increased 13% year over year.
Total revenues jumped 9.2% year over year to $4.4 billion due to increased premiums and other considerations, fees, and other revenues and net investment income.
Principal Financial witnessed higher revenues across Retirement and Income Solution, Investment Management, Specialty Benefits, and Life Insurance 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 8.2% year over year to $3.9 billion due to higher benefits, claims and settlement expenses and operating expenses.
As of Dec. 31, 2025, Principal Financial’s assets under management amounted to $781 billion, which is included in the assets under administration of $1.8 trillion.
Segment Update
Retirement and Income Solution: Revenues increased 15.6% year over year to $2.5 billion because of higher premiums and other considerations, fees and other revenues, and net investment income.
Pre-tax operating earnings increased 7% year over year to $299.5 million, primarily due to higher net revenues and disciplined expense management.
Investment Management: Revenues of $482.7 million were up 1.7% from the prior-year quarter due to higher fees and other revenues and net investment income.
Pre-tax operating earnings increased 2% year over year to $166.7 million. The increase was primarily due to higher operating revenues less pass-through expenses. Operating margin remains unchanged year over year to 38.3%.
International Pension: Revenues decreased 9.6% year over year to $216.6 million, owing to lower premiums and other considerations, fees and other revenues, and net investment income.
Pre-Tax operating earnings of $64.9 million increased 25% year over year. The increase was due to higher net revenues and disciplined expense management.
Specialty Benefits: Revenues increased 2.8% year over year to $898.2 million, owing to higher premiums and other considerations as well as net investment income.
Pre-tax operating earnings of $142.1 million decreased 3% year over year. The decrease was primarily due to the favorable one-time model refinement impact in the fourth quarter of 2024.
Life Insurance: Revenues increased 5.1% year over year to $346.1 million, owing to higher premiums and other considerations, fees and other revenues, and net investment income.
Pre-tax operating earnings of $27.5 million surged more than threefold year over year. The increase was driven by growth in the business, expense management discipline, and improved mortality experience.
Corporate: Pre-tax operating losses of $102.8 million were narrower than a loss of $103.9 million incurred a year ago.
Financial Update
As of Dec. 31, 2025, cash and cash equivalents were $4.4 billion, which increased 5.2% from 2024-end.
At the fourth-quarter end, long-term debt was $3.9 billion, which declined 0.7% from 2024-end. As of Dec. 31, 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 $57.25, up 6.6% from 2024-end.
Dividend and Share Repurchase Update
Principal Financial returned $1.5 billion of capital to shareholders for 2025, including $0.9 billion of share repurchases and $0.7 billion of dividends.
The board of directors raised the first-quarter dividend by 7% to 80 cents per share. The dividend will be payable on March 27, 2026, to shareholders of record as of March 11.
Full-Year Highlights
For 2025, Principal Financial reported an operating net income of $8.27 per share, which missed the Zacks Consensus Estimate by 0.3%. However, it increased 19% year over year.
Total operating revenues of $15.93 billion increased 2% year over year.
2026 Guidance
Principal Financial expects 9-12% annual non-GAAP operating earnings per diluted share growth.
PFG estimates 75-85% free capital flow conversion.
It expects 15-17% non-GAAP return on equity.
The insurer projects $1.5-$1.8 billion capital deployment, which includes $0.8-$1.1 billion of share repurchases and a 40% dividend ratio.
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 Insurers
CNA Financial Corporation (CNA - Free Report) reported fourth-quarter 2025 core earnings of $1.16 per share, which missed the Zacks Consensus Estimate by 3.3%. The bottom line, however, decreased 7.2% year over year. Total operating revenues of CNA Financial were $3.4 billion, up 3.8% year over year due to higher premiums and net investment income. The top line missed the Zacks Consensus Estimate by 1.2%.
Net written premiums of Property & Casualty Operations increased 2% year over year to $2.8 billion. The new business was flat. Net investment income rose 1.4% year over year to $653 million. Our estimate for net investment was $721.2 million. The Zacks Consensus Estimate was pegged at $721 million.
The Travelers Companies, Inc. (TRV - Free Report) reported fourth-quarter 2025 core income of $11.13 per share, which beat the Zacks Consensus Estimate by 32% and improved 22% year over year. Travelers’ total revenues increased 3.2% from the year-ago quarter to $12.4 billion, primarily driven by higher premiums, net investment income, and other revenues. The top line beat the Zacks Consensus Estimate by 0.08%.
Net written premiums increased 1% year over year to a record $10.8 billion. Net investment income increased 10.3% year over year to $1 billion. The figure matched the Zacks Consensus Estimate. Travelers witnessed an underwriting gain of $1.7 billion, up 21.7% year over year. The consolidated underlying combined ratio of 82.2 improved 180 bps year over year.
RLI Corp. (RLI - Free Report) reported fourth-quarter 2025 operating earnings of 94 cents per share, which beat the Zacks Consensus Estimate by 23.6%. The bottom line increased 80.8% from the prior-year quarter. Operating revenues for the reported quarter were $449 million, up 3% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Gross premiums written decreased 2.1% year over year to $463.2 million. This can be attributed to the poor performance of the Property Segment. Our estimate was $505.2 million. Net investment income increased 9.2% year over year to $42.3 million. The Zacks Consensus Estimate was $42.9 million, while our estimate for the metric was pegged at $44.5 million. The investment portfolio’s total return was 1.5% in the quarter.