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Principal Financial (PFG) to Report Q1 Earnings: What's Up?

Zacks Equity Research

Principal Financial Group, Inc. PFG is slated to report first-quarter 2019 results on Apr 25, after market close. In the last reported quarter, the company delivered negative surprise of 16.54%

Let’s see how things are shaping up for this announcement.

Principal Financial’s first-quarter results are likely to benefit from its expanded distribution network and wide range of retirement, investment and protection solutions.

Higher fee-based revenues and an increase in investment income are likely to drive revenue improvement. The Zacks Consensus Estimate for revenues is pegged at $3.7 billion, up 11.6% from fourth-quarter 2017.

Investment income is likely to benefit from improved interest rate environment.

The company is likely to witness improved results at three asset management and asset accumulation segments, driven by extensive distribution footprint, best-in-class solutions, strategic buyouts and operational discipline. These are expected to boost assets under management.

Continued share repurchases should lend additional upside to the bottom line.

However, the company expects operating expenses to increase attributable to higher branding expenses, benefit costs as well as variable sales expenses.

The Zacks Consensus Estimate for earnings stands at $1.32 per share, indicating a decline of 5.7% from the year-ago reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively show that Principal Financial is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Principal Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.32. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Principal Financial Group, Inc. Price and EPS Surprise

Principal Financial Group, Inc. Price and EPS Surprise | Principal Financial Group, Inc. Quote

Zacks Rank: Principal Financial carries a Zacks Rank #2. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against Zacks Rank #4 or 5 (Strong Sell) stocks going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider    

Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:

Invesco Ltd. IVZ is set to report first-quarter earnings on Apr 25. The stock has an Earnings ESP of +1.15% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Legg Mason, Inc. LM has an Earnings ESP of +4.33% and a Zacks Rank #2. The company is slated to release first-quarter earnings on Apr 24.

T. Rowe Price Group, Inc. TROW has an Earnings ESP of +2.31% and a Zacks Rank of 2. The company will announce first-quarter earnings on Apr 24.

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Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
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