Principal Financial (PFG) to Post Q3 Earnings: What to Expect?
Principal Financial Group, Inc. PFG is slated to report third-quarter 2023 earnings on Oct 26, after market close. PFG delivered an earnings surprise in two of the last four reported quarters and missed twice, the average being 4.2%.
Factors at Play
Principal Financial’s third-quarter results are likely to reflect favorable equity and fixed-income markets, higher premiums, other considerations and improved fixed maturity yields, offset by lower management fee revenues.
The Zacks Consensus Estimate for third-quarter 2023 revenues is pegged at $3.6 billion, indicating an improvement of 4.1% from the year-ago quarter’s reported figure.
Revenues in the Retirement and Income Solutions segment are likely to have increased because of strong sales retention and a strong employment market. An increase in retirement sales in the second half of 2023 is expected to have helped the company achieve an outlook of 1-4% for net revenue growth and 35-39% for operating margin in 2023. Moreover, the launch of a Hospital Indemnity insurance product in the last quarter is expected to have added to PFG’s existing benefits and fuel growth in the Specialty Benefits segment.
Investment income is expected to have benefited from new products and diversification in investment vehicles. However, lower variable investment income in Principal International, Benefits and Protection might bring down the figure in the third quarter.The Zacks Consensus Estimate for net investment income is pegged at $1 billion, suggesting an increase of 12.2% from the year-ago reported figure. We expect investment income to increase 2.7% to $936.7 million.
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 2.4% to $3.1 billion in the third quarter of 2023.
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 pension and other postretirement employee benefits expenses. We expect operating expenses to be $1.2 billion.
The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.66 per share, indicating a deterioration of 1.8% 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 here, as you can see below.
Earnings ESP: Principal Financial has an Earnings ESP of -1.62%. 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 #4 (Sell).
Stocks to Consider
Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:
Welltower Inc. WELL has an Earnings ESP of +0.45% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Welltower’s bottom line for the to-be-reported quarter is pegged at 89 cents per share, indicating 6% year-over-year growth. It has remained stable over the past week. The consensus estimate for WELL’s revenues is pegged at $1.6 billion, suggesting a 10.8% increase from a year ago. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brighthouse Financial, Inc. BHF has an Earnings ESP of +0.90% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $4 per share, indicating a massive improvement from the year-ago loss of 4 cents.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
KKR & Co. Inc. KKR has an Earnings ESP of +2.24% and a Zacks Rank of 3.
The Zacks Consensus Estimate for KKR’s bottom line for the to-be-reported quarter is pegged at 80 cents per share, which increased 2 cents in the past month. KKR beat earnings estimates in all the past four quarters, with an average surprise of 7.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
KKR & Co. Inc. (KKR) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
Welltower Inc. (WELL) : Free Stock Analysis Report
