Equitable Holdings Inc Reports Full Year and Q4 2023 Results Amidst Market Challenges
Net Income: Full year net income of $1.3 billion, down from $2.2 billion in 2022.
Non-GAAP Operating Earnings: $1.7 billion for the full year, consistent with $1.7 billion in 2022.
Q4 Performance: Net loss of $698 million in Q4, compared to a net income of $62 million in the same quarter last year.
Assets Under Management/Administration: Increased to $930 billion, a 13% rise from the previous year.
Shareholder Returns: $1.2 billion returned to shareholders, with a new $1.3 billion share repurchase authorization.
Business Segment Growth: Notable net inflows in Individual Retirement and Wealth Management advisory.
Future Outlook: Projected cash generation increase to $1.4 billion to $1.5 billion in 2024.
On February 6, 2024, Equitable Holdings Inc (NYSE:EQH) released its 8-K filing, detailing its financial results for the full year and fourth quarter ended December 31, 2023. Despite a challenging macroeconomic environment, EQH reported a full year net income of $1.3 billion, or $3.48 per share, although this was a decrease from $2.2 billion in the previous year. The fourth quarter, however, saw a net loss of $698 million, or $2.15 per share, a significant drop from the $62 million net income of Q4 2022.
Equitable Holdings Inc is a leading financial services company in the US, offering a range of products including variable annuities, tax-deferred investment and retirement plans, and protection solutions for individuals, families, and small businesses. The company operates through segments such as Individual Retirement, Group Retirement, Investment Management and Research, and Protection Solutions.
Financial Performance and Challenges
The company's full year Non-GAAP operating earnings remained stable at $1.7 billion, with a slight increase in per-share earnings from $4.33 to $4.59. Adjusting for notable items, the Non-GAAP operating earnings for the full year were $1.9 billion, or $5.13 per share. The fourth quarter Non-GAAP operating earnings were $476 million, or $1.33 per share, an increase from $348 million, or $0.87 per share in the same quarter of the previous year. These earnings reflect the company's resilience and ability to maintain profitability in a volatile market.
Equitable Holdings' total Assets Under Management/Administration (AUM/A) grew to $930 billion, a 13% increase from the previous year, driven by higher market performance. This growth in AUM/A is a critical metric for the company and the insurance industry, as it indicates the company's ability to attract and manage investments, which is fundamental to revenue generation.
Financial Achievements and Industry Significance
Equitable Holdings' ability to return $1.2 billion to shareholders within the year, including $315 million in the fourth quarter, demonstrates its commitment to shareholder value and financial strength. The Board's approval of a new $1.3 billion share repurchase authorization further underscores this commitment. For an insurance company, such capital return initiatives are significant as they reflect a solid balance sheet and the ability to generate surplus cash.
Key Financial Metrics and Commentary
Key financial metrics from the earnings report include:
"2023 was a momentous year for Equitable Holdings. We celebrated our fifth anniversary as a public company while also holding our inaugural investor day in May, where we highlighted our growth strategy and financial goals for the next five years," said Mark Pearson, President and Chief Executive Officer.
"Equitable delivered solid financial results despite an uncertain macro environment, and our businesses continue to drive predictable cash flow to Holdings, with $1.3 billion in 2023, in line with our full year guidance," Pearson added.
The company's solid business results, with full year cash flow of $1.3 billion in line with guidance, and strong organic growth momentum with significant net inflows in both Retirement and Wealth Management advisory segments, are particularly noteworthy. These inflows are vital as they represent new business and the potential for future revenue.
Analysis and Future Outlook
While Equitable Holdings faced short-term headwinds in 2023, the company's leadership is optimistic about accelerating non-GAAP operating earnings per share growth in 2024 and projects increased cash generation of $1.4 billion to $1.5 billion. This forward-looking statement indicates confidence in the company's strategic initiatives and organic growth within its Retirement and Wealth Management businesses.
In conclusion, Equitable Holdings Inc navigated a challenging year with a strong balance sheet and a strategic focus on growth. The company's performance, particularly in its Retirement and Wealth Management segments, along with its commitment to shareholder returns, positions it well for future growth despite the uncertain economic landscape.
Explore the complete 8-K earnings release (here) from Equitable Holdings Inc for further details.
This article first appeared on GuruFocus.
