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Principal Financial (PFG) Q2 Earnings and Revenues Beat
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Principal Financial Group, Inc.’s (PFG - Free Report) second-quarter 2019 operating net income of $1.52 per share beat the Zacks Consensus Estimate by 8.6%. Also, the bottom line increased 12.6% year over year.
Principal Financial recorded growth in assets under management (AUM). The company’s investment performance also remained solid. It was able to maintain disciplined expense management. Moreover, the company displayed a balanced approach to capital management.
Behind the Headlines
Operating revenues rose 25.5% year over year to nearly $4 billion. Higher premiums and other considerations plus net investment income drove this upside. The top line beat the Zacks Consensus Estimate by 4.2%.
Total expenses increased 29.5% year over year to $3.5 billion due to higher benefits, claims and settlement expenses as well as operating expenses.
Principal Financial’s AUM as of Jun 30, 2019 was a record $696.2 billion, up 4.4% year over year.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Retirement and Income Solution: Revenues surged 48.9% year over year to about $2.2 billion.
Pre-tax operating earnings increased 12.6% year over year to $256.2 million on account of solid performance at Retirement and Income Solution — Fee as well as Spread business.
Principal Global Investors: Revenues of $359.5 million were down 5.3% from the prior-year quarter.
Operating earnings declined 11% year over year to $115.6 million due to lower revenues and continued investments in the business.
Principal International: Revenues increased 5.6% year over year to $411.6 million in the quarter.
Operating earnings increased 8% year over year to $93.2 million driven by growth in the business and favorable encaje performance, partially offset by foreign currency translation headwinds and inflation in Latin America.
U.S. Insurance Solution: Revenues grew 8.3% year over year to $1.1 billion.
Operating earnings of $146.3 million increased 29.1% year over year, driven by sturdy performance at Specialty Benefits Insurance business.
Corporate: Operating loss of $983.1 million was wider than $70.7 million loss incurred a year ago. This downside was due to higher expenses.
Financial Update
As of Jun 30, 2019, cash and cash equivalents were $3.3 billion, up 41.6% year over year.
At second-quarter end, debt was $3.3 billion, up 16.9% year over year.
As of Jun 30, 2019, book value per share (excluding AOCI other than foreign currency translation adjustment) was $43.75, up 7% year over year.
Capital Deployment
Principal Financial paid $154.4 million in dividends.
The company committed $1.2 billion to acquire the Wells Fargo Institutional Retirement & Trust business.
The board of directors approved third-quarter dividend of 55 cents per share, up 4% year over year.
Among the investment managers that have reported second-quarter results so far, T. Rowe Price Group (TROW - Free Report) and Ameriprise Financial (AMP - Free Report) beat the respective Zacks Consensus Estimate for earnings. However, BlackRock (BLK - Free Report) missed the same.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
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Principal Financial (PFG) Q2 Earnings and Revenues Beat
Principal Financial Group, Inc.’s (PFG - Free Report) second-quarter 2019 operating net income of $1.52 per share beat the Zacks Consensus Estimate by 8.6%. Also, the bottom line increased 12.6% year over year.
Principal Financial recorded growth in assets under management (AUM). The company’s investment performance also remained solid. It was able to maintain disciplined expense management. Moreover, the company displayed a balanced approach to capital management.
Behind the Headlines
Operating revenues rose 25.5% year over year to nearly $4 billion. Higher premiums and other considerations plus net investment income drove this upside. The top line beat the Zacks Consensus Estimate by 4.2%.
Total expenses increased 29.5% year over year to $3.5 billion due to higher benefits, claims and settlement expenses as well as operating expenses.
Principal Financial’s AUM as of Jun 30, 2019 was a record $696.2 billion, up 4.4% year over year.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Principal Financial Group, Inc. price-consensus-eps-surprise-chart | Principal Financial Group, Inc. Quote
Segment Update
Retirement and Income Solution: Revenues surged 48.9% year over year to about $2.2 billion.
Pre-tax operating earnings increased 12.6% year over year to $256.2 million on account of solid performance at Retirement and Income Solution — Fee as well as Spread business.
Principal Global Investors: Revenues of $359.5 million were down 5.3% from the prior-year quarter.
Operating earnings declined 11% year over year to $115.6 million due to lower revenues and continued investments in the business.
Principal International: Revenues increased 5.6% year over year to $411.6 million in the quarter.
Operating earnings increased 8% year over year to $93.2 million driven by growth in the business and favorable encaje performance, partially offset by foreign currency translation headwinds and inflation in Latin America.
U.S. Insurance Solution: Revenues grew 8.3% year over year to $1.1 billion.
Operating earnings of $146.3 million increased 29.1% year over year, driven by sturdy performance at Specialty Benefits Insurance business.
Corporate: Operating loss of $983.1 million was wider than $70.7 million loss incurred a year ago. This downside was due to higher expenses.
Financial Update
As of Jun 30, 2019, cash and cash equivalents were $3.3 billion, up 41.6% year over year.
At second-quarter end, debt was $3.3 billion, up 16.9% year over year.
As of Jun 30, 2019, book value per share (excluding AOCI other than foreign currency translation adjustment) was $43.75, up 7% year over year.
Capital Deployment
Principal Financial paid $154.4 million in dividends.
The company committed $1.2 billion to acquire the Wells Fargo Institutional Retirement & Trust business.
The board of directors approved third-quarter dividend of 55 cents per share, up 4% year over year.
Zacks Rank
Principal Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Investment Managers
Among the investment managers that have reported second-quarter results so far, T. Rowe Price Group (TROW - Free Report) and Ameriprise Financial (AMP - Free Report) beat the respective Zacks Consensus Estimate for earnings. However, BlackRock (BLK - Free Report) missed the same.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>