Principal Financial (PFG) to Post Q2 Earnings: What to Expect?
Principal Financial Group, Inc. PFG is slated to report second-quarter 2023 earnings on Jul 27, after market close. PFG delivered an earnings surprise in three of the last four reported quarters and missed in one, the average being 10.8%.
Factors at Play
Principal Financial’s second-quarter results are likely to reflect favorable equity and fixed-income markets, positive net cash flow, higher premiums, other considerations and improved fixed maturity yields, offset by lower management fee revenues.
Revenues in the Retirement and Income Solutions segment are likely to have decreased because of lower net investment income, declining fee revenues due to average account values pressured by market depreciation and impacts from the 2022 Reinsurance Transaction.
Investment income is likely to have been affected by the impacts of the second quarter of 2022 Reinsurance Transaction and lower inflation-based investment returns on Latin America's average invested assets. The downside is likely to have been partially offset by higher fixed maturity yields in U.S. operations and favorable relative market performance on required regulatory investments. The Zacks Consensus Estimate for net investment income is pegged at $1 billion, suggesting an increase of 26.3% from the year-ago reported figure. We expect investment income to increase 14.8% to $940.8 million.
Revenue growth in the to-be-reported quarter is likely to have been affected by the impact of exited ULSG business in the Life Insurance business and lower management fee revenues, partly offset by higher premiums and other considerations.
The Zacks Consensus Estimate for second-quarter 2023 revenues is pegged at $3.5 billion, indicating an improvement of 11% from the year-ago quarter’s reported figure.
Assets under management are likely to have benefited from favorable equity and fixed income markets, positive net cash flow as well as positive impacts from foreign currency.
Expenses are likely to have increased due to higher benefits, claims and settlement expenses and operating expenses. We expect total expenses to increase 11.4% to $3 billion.
Operating expenses are likely to have increased due to a rise in amounts credited to employee accounts in a nonqualified defined contribution pension plan and in pension and other postretirement employee benefits expenses. We expect operating expenses to be $1.3 billion.
The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.66 per share, indicating an improvement of 0.61% from the year-ago reported figure.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Principal Financial this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case as you can see below.
Earnings ESP: Principal Financial has an Earnings ESP of -0.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Principal Financial Group, Inc. Price and EPS Surprise
Principal Financial Group, Inc. price-eps-surprise | Principal Financial Group, Inc. Quote
Zacks Rank: Principal Financial currently carries a Zacks Rank #2.
Stocks to Consider
Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:
Assurant, Inc. AIZ has an Earnings ESP of +0.52% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $2.60, indicating a year-over-year decline of 11.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
American Equity Investment Life Holding Company AEL has an Earnings ESP of +1.70% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.67, indicating a year-over-year increase of 70.4%.
AEL’s earnings beat estimates in three of the last four quarters and missed in the other one.
Brighthouse Financial, Inc. BHF has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $3.55, indicating a year-over-year increase of 7.9%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Assurant, Inc. (AIZ) : Free Stock Analysis Report
Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
