Voya Financial (VOYA) Q4 Earnings & Revenues Lag Estimates
Voya Financial VOYA reported fourth-quarter 2023 adjusted operating earnings of $1.97 per share, which missed the Zacks Consensus Estimate by about 1%. The bottom line decreased 9.6% year over year, attributable to disappointing net underwriting results, partially offset by higher fee income.
Behind the Headlines
Adjusted operating revenues amounted to $236 million, which decreased 11.3% year over year. The top line missed the Zacks Consensus Estimate by 22.5%.
Net investment income decreased 4.7% year over year to $522 million. Meanwhile, fee income of $489 million increased 8.4% year over year. Premiums totaled $673 million, up 10% from the year-ago quarter. Total benefits and expenses were $1.7 billion, up 16.6% from the year-ago quarter.
As of Dec 31, 2023, VOYA’s assets under management and assets under administration and advisement totaled $813.5 million.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Voya Financial, Inc. price-consensus-eps-surprise-chart | Voya Financial, Inc. Quote
Segmental Update
Wealth Solutions recorded adjusted operating earnings of $147 million, which decreased 1.3% year over year, as higher alternative investment income and favorable equity market impacts to fee-based margins were partially offset by lower spread-based revenues. Full-service recurring deposits grew 10.2% to $14.7 billion, driven by growth in both Corporate and Tax-Exempt markets.
Health Solutions adjusted operating earnings amounted to $44 million, which declined 43.6% year over year, largely attributable to the prior-year period benefiting from exceptionally strong underwriting results in Voluntary and Stop Loss. Annualized in-force premiums and fees grew 19.8% to $3.3 billion on growth across all product lines, favorable retention and the positive impact of the Benefitfocus acquisition, which closed in January 2023.
Investment Management posted adjusted operating earnings, excluding Allianz's noncontrolling interest, of $45 million, which increased 7.1.% year over year. Earnings were driven by higher fee revenues resulting from the cumulative effect of 2023 retail net inflows driven by international distribution, positive capital markets and positive investment capital returns. Net outflows were $14 billion during the trailing 12 months ended Dec 31, 2023.
Corporate incurred an adjusted operating loss of $34 million, narrower than a loss of $59 million incurred in the year-ago quarter.
Financial Update
Voya Financial exited the quarter with cash and cash equivalents of $937 million, which increased 2% year over year. Total investments amounted to $36.6 billion, down 6.4% year over year.
Long-term debt at quarter-end was $2.1 billion, down 13.9% from 2022 end.
The financial leverage ratio improved 670 basis points year over year to 33.3%.
As of Dec 31, 2023, book value per share (excluding AOCI) was $58.12, which decreased 2.4% year over year. Voya Financial exited 2023 with more than $0.4 billion in excess capital.
Capital Deployment
Voya Financial deployed approximately $1.3 billion of excess capital in 2023, of which approximately $200 million was deployed in the fourth quarter, including $158 million in share repurchases and $42 million in common stock dividends.
Zacks Rank
Voya 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 Insurers
Reinsurance Group of America RGA reported fourth-quarter 2023 adjusted operating earnings of $4.73 per share, which beat the Zacks Consensus Estimate by 7.5%. Moreover, the bottom line increased 52.8% from the year-ago quarter’s figure.
RGA's operating revenues of $5.2 billion beat the Zacks Consensus Estimate by 13.2%. The top line also improved 18.2% year over year due to higher net premiums. Net premiums of $4.1 billion rose 19.2% year over year.
W.R. Berkley Corporation’s WRB fourth-quarter 2023 operating income of $1.45 per share beat the Zacks Consensus Estimate of $1.35 by 7.4%. The bottom line improved 25% year over year. Operating revenues came in at $3.2 billion, up 9.3% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 1.3%
W.R. Berkley’s net premiums written were $2.7 billion, up 12% year over year. The figure was lower than our estimate of $2.8 billion. Pre-tax underwriting income increased 8.2% to $315.9 million. The consolidated combined ratio remained flat year over year at 88.4.
Unum Group’s UNM fourth-quarter 2023 operating net income of $1.79 per share missed the Zacks Consensus Estimate by 3.8%. The bottom line, however, increased 25.1% year over year.
Total operating revenues of Unum Group were $3.2 billion, up 5% year over year, driven by higher premium income, other income and improved net investment income. The top line beat the Zacks Consensus Estimate by 0.8%.
Premiums increased 5.9% from the prior-year quarter to $2.6 billion. Our estimate and the Zacks Consensus Estimate were both pegged at $2.5 billion.
UNM expects after-tax adjusted operating income per share to increase 7% to 9% in 2024.
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