Principal Financial (PFG) Q3 Earnings Beat, Revenues Miss
Principal Financial Group, Inc.’s PFG third-quarter 2021 operating net income of $1.69 per share beat the Zacks Consensus Estimate by 6.3%. Also, the bottom line increased 98.8% year over year.
Principal Financial witnessed higher revenues across its business lines, higher assets under management (AUM) and lower 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
Operating revenues increased 10% year over year to nearly $3.6 billion, primarily due to higher premiums and other considerations, fees and other revenues, and net investment income. The top line however missed the Zacks Consensus Estimate by nearly 9.2%.
Total expenses decreased 1.3% year over year to $2.9 billion due to lower benefits, claims and dividends to policyholders.
Principal Financial’s AUM as of Sep 30, 2021 was $981 billion, up 34.1% year over year.
Segment Update
Retirement and Income Solution: Revenues increased 6.6% year over year to about $1.6 billion.
Pretax operating earnings increased 13.5% year over year to $243.2 million on account of the solid performance at Retirement and Income Solution — Fee as well as Spread business.
Principal Global Investors: Revenues of $465.2 million were up 21.5% from the prior-year quarter.
Operating earnings increased 34.9% year over year to $190.1 million, primarily due to higher operating revenues less pass-through expenses, partially offset by higher operating expenses.
Principal International: Revenues increased 45.6% year over year to $328.1 million in the quarter.
Operating earnings increased 37.9% year over year to $81 million.
U.S. Insurance Solution: Revenues increased 6.1% year over year to $1.2 billion.
Operating earnings were $151.6 million against an operating loss of $134.1 million in the prior-year quarter, primarily due to improved performance at the Specialty Benefits Insurance business and Individual Life Insurance.
Corporate: Operating loss of $97.1 million was wider than $69.7 million loss incurred a year ago, primarily due to higher operating expenses.
Financial Update
As of Sep 30, 2021, cash and cash equivalents were $3.1 billion, down 11.6% year over year.
At third-quarter end, debt was $4.3 billion, unchanged year over year.
As of Sep 30, 2021, book value per share (excluding AOCI other than foreign currency translation adjustment) was $48.58, up 3.2% from the 2020-end level.
Capital Deployment
Principal Financial paid out $168.2 million in dividends. The board of directors approved fourth-quarter dividend of 64 cents per share, up 14% year over year.
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 Investment Managers
Among the investment managers that have reported third-quarter results so far, Blackstone BX, Invesco IVZ and BlackRock BLK beat the respective Zacks Consensus Estimate for earnings.
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