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Voya Financial (VOYA) Q2 Earnings Beat, Revenues Fall Y/Y
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Voya Financial, Inc.’s (VOYA - Free Report) second-quarter 2020 net operating income of $1.09 per share beat the Zacks Consensus Estimate by 34.6%. However, the bottom line declined 28.3% year over year. The results reflect poor performance in each of its core businesses.
The company’s revenues of $93 million declined 70.7% from the year-ago quarter.
Net investment income dipped 17.6% to $586 million in the quarter.
Fee income declined 5.2% year over year to $458 million. Premiums rose 5.2% year over year to $607 million.
Total benefits and expenses decreased 0.8% year over year to $1.7 billion, owing to lower operating expenses, net amortization of DAC/VOBA, interest expenses and reduced operating expenses related to consolidated investment entities.
Assets under management and administration were $606 billion as of Jun 30, 2020.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Retirement’s adjusted operating earnings of $37 million decreased 79.4% year over year due to lower fee-based margin primarily on lower bank sweep revenues, lower investment income, higher administrative expenses, offset by positive DAC/VOBA and other intangibles.
Investment Management posted adjusted operating earnings of $20 million, down 51.2% year over year due to lower fee-based margin, primarily driven by lower retail fee revenues and lower investment capital revenues, offset by lower administrative expenses.
It generated $7.1 billion of institutional net flows in the second quarter, which soared 821% year over year.
Employee Benefits’ adjusted operating earnings were $36 million, down 26.5% year over year due to lower investment income and higher administrative expenses, offset by improved underwriting results, courtesy of growth in the Voluntary block and improvement in the loss ratio for Stop Loss.
Corporate incurred adjusted operating losses of $75 million, narrower than the year-ago quarterly loss of $80 million, owing to the removal of stranded costs associated with the company's sale of the majority of its annuities businesses, and lower pension and incentive costs in the reported quarter. It was partially offset by a quarterly dividend payment on the additional preferred stock issued by Voya Financial in the second quarter of 2019 and lower revenues from transition service agreements.
Financial Update
As of Jun 30, 2020, cash and cash equivalents were $1.1 billion, down 5.8% year over year.
As of Jun 30, 2020, total investments were $55.5 billion, up 4.9% year over year.
At the second-quarter end, long-term debt was $3 billion, up 0.03% from 2019 end.
Adjusted debt to capital expanded 200 bps to 32.4% from 2019 end.
As of Jun 30, 2020, book value per share (excluding AOCI) was $38.83, down 6% from 2019 end.
Voya Financial exited the second quarter with $668 million in excess capital. Estimated combined RBC ratio was 468% as on Jun 30, 2020.
Dividend Update
Last month, the company approved a quarterly dividend of 15 cents per share. The dividend will be paid out on Sep 28, 2020, to shareholders of record as of Aug 31.
Of the insurance industry players that have reported second-quarter results so far, earnings of Arthur J. Gallagher & Co. (AJG - Free Report) , Reinsurance Group of America, Incorporated (RGA - Free Report) , and Palomar Holdings, Inc. (PLMR - Free Report) beat the Zacks Consensus Estimate.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Voya Financial (VOYA) Q2 Earnings Beat, Revenues Fall Y/Y
Voya Financial, Inc.’s (VOYA - Free Report) second-quarter 2020 net operating income of $1.09 per share beat the Zacks Consensus Estimate by 34.6%. However, the bottom line declined 28.3% year over year. The results reflect poor performance in each of its core businesses.
The company’s revenues of $93 million declined 70.7% from the year-ago quarter.
Net investment income dipped 17.6% to $586 million in the quarter.
Fee income declined 5.2% year over year to $458 million. Premiums rose 5.2% year over year to $607 million.
Total benefits and expenses decreased 0.8% year over year to $1.7 billion, owing to lower operating expenses, net amortization of DAC/VOBA, interest expenses and reduced operating expenses related to consolidated investment entities.
Assets under management and administration were $606 billion as of Jun 30, 2020.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Voya Financial, Inc. price-consensus-eps-surprise-chart | Voya Financial, Inc. Quote
Segmental Update
Retirement’s adjusted operating earnings of $37 million decreased 79.4% year over year due to lower fee-based margin primarily on lower bank sweep revenues, lower investment income, higher administrative expenses, offset by positive DAC/VOBA and other intangibles.
Investment Management posted adjusted operating earnings of $20 million, down 51.2% year over year due to lower fee-based margin, primarily driven by lower retail fee revenues and lower investment capital revenues, offset by lower administrative expenses.
It generated $7.1 billion of institutional net flows in the second quarter, which soared 821% year over year.
Employee Benefits’ adjusted operating earnings were $36 million, down 26.5% year over year due to lower investment income and higher administrative expenses, offset by improved underwriting results, courtesy of growth in the Voluntary block and improvement in the loss ratio for Stop Loss.
Corporate incurred adjusted operating losses of $75 million, narrower than the year-ago quarterly loss of $80 million, owing to the removal of stranded costs associated with the company's sale of the majority of its annuities businesses, and lower pension and incentive costs in the reported quarter. It was partially offset by a quarterly dividend payment on the additional preferred stock issued by Voya Financial in the second quarter of 2019 and lower revenues from transition service agreements.
Financial Update
As of Jun 30, 2020, cash and cash equivalents were $1.1 billion, down 5.8% year over year.
As of Jun 30, 2020, total investments were $55.5 billion, up 4.9% year over year.
At the second-quarter end, long-term debt was $3 billion, up 0.03% from 2019 end.
Adjusted debt to capital expanded 200 bps to 32.4% from 2019 end.
As of Jun 30, 2020, book value per share (excluding AOCI) was $38.83, down 6% from 2019 end.
Voya Financial exited the second quarter with $668 million in excess capital.
Estimated combined RBC ratio was 468% as on Jun 30, 2020.
Dividend Update
Last month, the company approved a quarterly dividend of 15 cents per share. The dividend will be paid out on Sep 28, 2020, to shareholders of record as of Aug 31.
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
Of the insurance industry players that have reported second-quarter results so far, earnings of Arthur J. Gallagher & Co. (AJG - Free Report) , Reinsurance Group of America, Incorporated (RGA - Free Report) , and Palomar Holdings, Inc. (PLMR - Free Report) beat the Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>