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Voya Financial's (VOYA) Q3 Earnings Miss Estimates, Rise Y/Y
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Voya Financial, Inc.’s (VOYA - Free Report) third-quarter 2021 net operating income of $1.36 per share missed the Zacks Consensus Estimate by 13.4%. The bottom line increased 14.3% year over year.
The company’s results reflected lower net investment income and fee income, and lower expenses.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Total revenues decreased 8.2% year over year to $1.8 billion.
Net investment income decreased 8.6% to $731 million in the quarter. Fee income decreased 3.9% year over year to $487 million. Premiums decreased 5.1% to $573 million.
Total benefits and expenses decreased 27.9% year over year to $1.6 billion due to lower interest credited and other benefits to contract owners and policyholders, net amortization of DAC/VOBA and interest expense.
Assets under management and administration were $718 billion as of Sep 30, 2021.
Segmental Update
Wealth Solutions’ adjusted operating earnings of $319 million increased nearly 13-fold year over year. This upside was due to higher investment income, primarily driven by an increase in alternative investment and prepayment income, higher fee-based margin driven by higher average equity market levels and cumulative net flows, and favorable change in DAC/VOBA and other intangibles unlocking. This was offset by higher administrative expenses.
Investment Management posted adjusted operating earnings of $63 million, up 34% year over year. The upside was due to higher investment capital revenues, including higher private equity results in the third quarter of 2021, higher fee-based margin driven by higher private equity fees and market appreciation, partially offset by lower revenues due to the company's sale of its Individual Life and other legacy annuities businesses. The year over year increase was offset by higher administrative expenses, primarily due to higher variable expenses associated with increased revenues.
It had $753 million of institutional net outflows in the third quarter.
Health Solutions’ adjusted operating earnings were $71 million, up 26.9% year over year. The upside was due to $19 million of improved underwriting results. Business growth and lower loss ratios in Stop Loss and Voluntary were partially offset by a higher Group Life loss ratio, $13 million of higher investment income, primarily due to an increase in alternative investment income as well as $13 million of higher administrative expenses, largely due to the growth of the business.
Corporate incurred adjusted operating losses of $65 million, narrower than the year-ago quarterly loss of $88 million. This reflects revenue from the company's transition service agreements and the continued removal of stranded costs associated with the Individual Life transaction as well as lower intangibles amortization. These were partially offset by higher incentive compensation due to strong business results and higher alternative investment income.
Financial Update
As of Sep 30, 2021, cash and cash equivalents were $1.7 billion, up 59.4% year over year.
As of Sep 30, 2021, total investments were $46.4 billion, down 17.2% year over year.
At the third-quarter end, long-term debt was $2.9 billion, down 2.4% from 2020 end.
Financial leverage ratio deteriorated 130 basis points to 29.5% from 2020 end.
As of Sep 30, 2021, book value per share (excluding AOCI) was $48.59, up 36.4% year over year.
Voya Financial exited the third quarter with $1.5 billion in excess capital.
Dividend Update
Voya Financial increased its dividend by more than 20% beginning with the fourth quarter of 2021.
As of Sep 30, 2021, Voya repurchased shares of $833 million. Voya aims to repurchase at least $1.1 billion of shares in 2021 and authorized the repurchase of an additional share $500 million.
Including the new $500 million repurchase authorization, Voya has approximately $831 million remaining under its share repurchase authorizations.
Of the insurance industry players that have reported third-quarter results so far, Selective Insurance Group, Inc. (SIGI - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) beat the respective Zacks Consensus Estimate for earnings.
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Voya Financial's (VOYA) Q3 Earnings Miss Estimates, Rise Y/Y
Voya Financial, Inc.’s (VOYA - Free Report) third-quarter 2021 net operating income of $1.36 per share missed the Zacks Consensus Estimate by 13.4%. The bottom line increased 14.3% year over year.
The company’s results reflected lower net investment income and fee income, and lower expenses.
Voya Financial, Inc. Price, Consensus and EPS Surprise
Voya Financial, Inc. price-consensus-eps-surprise-chart | Voya Financial, Inc. Quote
Behind the Headlines
Total revenues decreased 8.2% year over year to $1.8 billion.
Net investment income decreased 8.6% to $731 million in the quarter. Fee income decreased 3.9% year over year to $487 million. Premiums decreased 5.1% to $573 million.
Total benefits and expenses decreased 27.9% year over year to $1.6 billion due to lower interest credited and other benefits to contract owners and policyholders, net amortization of DAC/VOBA and interest expense.
Assets under management and administration were $718 billion as of Sep 30, 2021.
Segmental Update
Wealth Solutions’ adjusted operating earnings of $319 million increased nearly 13-fold year over year. This upside was due to higher investment income, primarily driven by an increase in alternative investment and prepayment income, higher fee-based margin driven by higher average equity market levels and cumulative net flows, and favorable change in DAC/VOBA and other intangibles unlocking. This was offset by higher administrative expenses.
Investment Management posted adjusted operating earnings of $63 million, up 34% year over year. The upside was due to higher investment capital revenues, including higher private equity results in the third quarter of 2021, higher fee-based margin driven by higher private equity fees and market appreciation, partially offset by lower revenues due to the company's sale of its Individual Life and other legacy annuities businesses. The year over year increase was offset by higher administrative expenses, primarily due to higher variable expenses associated with increased revenues.
It had $753 million of institutional net outflows in the third quarter.
Health Solutions’ adjusted operating earnings were $71 million, up 26.9% year over year. The upside was due to $19 million of improved underwriting results. Business growth and lower loss ratios in Stop Loss and Voluntary were partially offset by a higher Group Life loss ratio, $13 million of higher investment income, primarily due to an increase in alternative investment income as well as $13 million of higher administrative expenses, largely due to the growth of the business.
Corporate incurred adjusted operating losses of $65 million, narrower than the year-ago quarterly loss of $88 million. This reflects revenue from the company's transition service agreements and the continued removal of stranded costs associated with the Individual Life transaction as well as lower intangibles amortization. These were partially offset by higher incentive compensation due to strong business results and higher alternative investment income.
Financial Update
As of Sep 30, 2021, cash and cash equivalents were $1.7 billion, up 59.4% year over year.
As of Sep 30, 2021, total investments were $46.4 billion, down 17.2% year over year.
At the third-quarter end, long-term debt was $2.9 billion, down 2.4% from 2020 end.
Financial leverage ratio deteriorated 130 basis points to 29.5% from 2020 end.
As of Sep 30, 2021, book value per share (excluding AOCI) was $48.59, up 36.4% year over year.
Voya Financial exited the third quarter with $1.5 billion in excess capital.
Dividend Update
Voya Financial increased its dividend by more than 20% beginning with the fourth quarter of 2021.
As of Sep 30, 2021, Voya repurchased shares of $833 million. Voya aims to repurchase at least $1.1 billion of shares in 2021 and authorized the repurchase of an additional share $500 million.
Including the new $500 million repurchase authorization, Voya has approximately $831 million remaining under its share repurchase authorizations.
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 third-quarter results so far, Selective Insurance Group, Inc. (SIGI - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) beat the respective Zacks Consensus Estimate for earnings.