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Principal Financial (PFG) Q2 Earnings Miss, Revenues Rise Y/Y
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Principal Financial Group, Inc.’s (PFG - Free Report) second-quarter 2024 operating net income of $1.63 per share missed the Zacks Consensus Estimate by 12.8%. However, the bottom line increased 7% year over year.
Operating revenues jumped 16.3% year over year to $4 billion due to increased premiums and other considerations, fees and other revenues and net investment income. The metric surpassed the Zacks Consensus Estimate by 7.8%.
Principal Financial witnessed higher revenues across most of the segments and improved asset under management (AUM), offset by soft performance at Principal International and Corporate segments and higher expenses.
Principal Financial Group, Inc. Price, Consensus and EPS Surprise
Total expenses increased 24.6% year over year to $3.8 billion due to higher benefits, claims and settlement expenses and operating expenses. The figure was higher than our estimate of $3.2 billion.
As of Jun 30, 2024, Principal Financial’s AUM amounted to $699.2 billion, up 4% year over year.
Segment Update
Retirement and Income Solution: Revenues increased 31% year over year to $2.2 billion because of higher premiums and other considerations, fees and other revenues and net investment income. The figure beat our estimate of $1.7 billion.
Pre-tax operating earnings increased 15% year over year to $267.8 million, primarily due to higher net revenues and operating margin. The figure lagged our estimate of $588.2 million.
Principal Global Investors: Revenues of $410.3 million were up 5.1% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure beat our estimate of $394.9 million.
Pre-tax operating earnings increased 2% year over year to $126.9 million due to higher operating revenues and less pass-through expenses, partially offset by higher operating expenses. The figure lagged our estimate of $139.5 million.
Principal International: Revenues decreased 7.7% year over year to $279 million in the quarter due to lower fees and other revenues and net investment income. The figure beat our estimate of $273.5 million.
Pre-tax operating earnings decreased 1% year over year to $62.5 million, primarily due to lower combined net revenues, offset by lower operating expenses. The figure lagged our estimate of $72 million.
Benefits and Protection: Revenues increased 5.5% year over year to $1.1 billion, owing to higher premiums and other considerations, net investment income, fees and other revenues. The metric lagged our estimate of $1.2 billion.
Pre-tax operating earnings of $132.3 million increased 5.9% year over year. The metric lagged our estimate of $208.3 million.
Specialty Benefits: Revenues increased 8.3% year over year to $858.3 million, owing to higher premiums and other considerations and net investment income. The metric lagged our estimate by a whisker.
Pre-tax operating earnings of $108.7 million jumped 11% year over year. The rise was due to growth in the business and lower incurred loss ratio. The metric beat our estimate of $102 million.
Life Insurance: Revenues decreased 1.2% year over year to $329.1 million due to lower fees and other revenues. The metric missed our estimate of $396.9 million.
Pre-tax operating earnings of $23.6 million plunged 12% year over year, primarily due to a GAAP-only regulatory closed block dividend adjustment. The metric missed our estimate of $106.4 million.
Corporate: The operating loss of $103.4 million was wider than the $97.4 million loss incurred a year ago. This decrease was due to higher operating expenses. The figure was wider than our estimate of a loss of $96.9 million.
Financial Update
As of Jun 30, 2024, cash and cash equivalents were $4.8 billion, up 2.3% from 2023-end.
At the second-quarter end, debt was $3.9 billion, which decreased 0.2% from 2023-end. As of Jun 30, 2024, book value per share (excluding AOCI other than foreign currency translation adjustment) was $53.32, which decreased 1% from the end of 2023.
Dividend and Share Repurchase Update
Principal Financial returned $415 million to shareholders, which include $250 million of share repurchases and $165 million of dividends.
The board of directors declared a third-quarter dividend of 72 cents per share, 1.4% higher than the previous dividend of 71 cents. The dividend will be paid out on Sep 27, 2024, to shareholders of record as of Sep 5.
Invesco Ltd.’s (IVZ - Free Report) second-quarter 2024 adjusted earnings of 43 cents per share surpassed the Zacks Consensus Estimate of 41 cents. The bottom line increased 38.7% from the prior-year quarter. On a GAAP basis, net income attributable to common shareholders was $132.2 million or 29 cents per share, unchanged from a year ago. Our estimate for the metric was $146.4 million.
Adjusted net revenues were $1.09 billion, falling marginally year over year. The top line marginally surpassed the Zacks Consensus Estimate of $1.08 billion. Adjusted operating expenses were $750.5 million, down 4.8% on a year-over-year basis. We expected the metric to be $787.9 million. The adjusted operating margin was 30.9%, up from 27.7% a year ago.
SEI Investments Company (SEIC - Free Report) second-quarter 2024 earnings of $1.05 per share surpassed the Zacks Consensus Estimate by a penny. The bottom line reflected a rise of 18% from the prior-year quarter's level. Net income was $139.1 million, up 17% from the year-ago quarter's level. Our estimate for the metric was $129.4 million. Total revenues were $519 million, up 6% year over year. However, the top line missed the Zacks Consensus Estimate of $524 million.
Total expenses were $382.5 million, up 2% year over year. Our estimate for the metric was $399.6 million. Operating income increased 21% year over year to $136.5 million. Our estimate for the metric was $119.9 million. As of Jun 30, 2024, AUM was $470.5 billion, reflecting a rise of 13% from the prior-year quarter's reported actuals. Client assets under administration were $1 trillion, up 16% year over year.
BlackRock, Inc. (BLK - Free Report) second-quarter 2024 adjusted earnings of $10.36 per share handily surpassed the Zacks Consensus Estimate of $9.96. The figure reflects a rise of 12% from the year-ago quarter. Shares of BLK are trending almost 1.5% higher in the pre-market trading session today.
Net income attributable to BlackRock (on a GAAP basis) was $1.5 billion, increasing 9% from the prior-year quarter. We had projected the metric to be $1.43 billion. Revenues (on a GAAP basis) in the quarter were $4.81 billion, lagging the Zacks Consensus Estimate of $4.86 billion. However, the figure increased 8% year over year. Total expenses amounted to $3.01 billion, rising 6%. Our estimate for expenses was $3.05 billion. Non-operating income (on a GAAP basis) was $214 million, down 15%. Our estimate for non-operating income was $216.8 million. BlackRock’s adjusted operating income was $1.88 billion, climbing 12% from the prior-year quarter.
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Principal Financial (PFG) Q2 Earnings Miss, Revenues Rise Y/Y
Principal Financial Group, Inc.’s (PFG - Free Report) second-quarter 2024 operating net income of $1.63 per share missed the Zacks Consensus Estimate by 12.8%. However, the bottom line increased 7% year over year.
Operating revenues jumped 16.3% year over year to $4 billion due to increased premiums and other considerations, fees and other revenues and net investment income. The metric surpassed the Zacks Consensus Estimate by 7.8%.
Principal Financial witnessed higher revenues across most of the segments and improved asset under management (AUM), offset by soft performance at Principal International and Corporate segments and higher 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
Total expenses increased 24.6% year over year to $3.8 billion due to higher benefits, claims and settlement expenses and operating expenses. The figure was higher than our estimate of $3.2 billion.
As of Jun 30, 2024, Principal Financial’s AUM amounted to $699.2 billion, up 4% year over year.
Segment Update
Retirement and Income Solution: Revenues increased 31% year over year to $2.2 billion because of higher premiums and other considerations, fees and other revenues and net investment income. The figure beat our estimate of $1.7 billion.
Pre-tax operating earnings increased 15% year over year to $267.8 million, primarily due to higher net revenues and operating margin. The figure lagged our estimate of $588.2 million.
Principal Global Investors: Revenues of $410.3 million were up 5.1% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure beat our estimate of $394.9 million.
Pre-tax operating earnings increased 2% year over year to $126.9 million due to higher operating revenues and less pass-through expenses, partially offset by higher operating expenses. The figure lagged our estimate of $139.5 million.
Principal International: Revenues decreased 7.7% year over year to $279 million in the quarter due to lower fees and other revenues and net investment income. The figure beat our estimate of $273.5 million.
Pre-tax operating earnings decreased 1% year over year to $62.5 million, primarily due to lower combined net revenues, offset by lower operating expenses. The figure lagged our estimate of $72 million.
Benefits and Protection: Revenues increased 5.5% year over year to $1.1 billion, owing to higher premiums and other considerations, net investment income, fees and other revenues. The metric lagged our estimate of $1.2 billion.
Pre-tax operating earnings of $132.3 million increased 5.9% year over year. The metric lagged our estimate of $208.3 million.
Specialty Benefits: Revenues increased 8.3% year over year to $858.3 million, owing to higher premiums and other considerations and net investment income. The metric lagged our estimate by a whisker.
Pre-tax operating earnings of $108.7 million jumped 11% year over year. The rise was due to growth in the business and lower incurred loss ratio. The metric beat our estimate of $102 million.
Life Insurance: Revenues decreased 1.2% year over year to $329.1 million due to lower fees and other revenues. The metric missed our estimate of $396.9 million.
Pre-tax operating earnings of $23.6 million plunged 12% year over year, primarily due to a GAAP-only regulatory closed block dividend adjustment. The metric missed our estimate of $106.4 million.
Corporate: The operating loss of $103.4 million was wider than the $97.4 million loss incurred a year ago. This decrease was due to higher operating expenses. The figure was wider than our estimate of a loss of $96.9 million.
Financial Update
As of Jun 30, 2024, cash and cash equivalents were $4.8 billion, up 2.3% from 2023-end.
At the second-quarter end, debt was $3.9 billion, which decreased 0.2% from 2023-end. As of Jun 30, 2024, book value per share (excluding AOCI other than foreign currency translation adjustment) was $53.32, which decreased 1% from the end of 2023.
Dividend and Share Repurchase Update
Principal Financial returned $415 million to shareholders, which include $250 million of share repurchases and $165 million of dividends.
The board of directors declared a third-quarter dividend of 72 cents per share, 1.4% higher than the previous dividend of 71 cents. The dividend will be paid out on Sep 27, 2024, to shareholders of record as of Sep 5.
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 Finance Stocks
Invesco Ltd.’s (IVZ - Free Report) second-quarter 2024 adjusted earnings of 43 cents per share surpassed the Zacks Consensus Estimate of 41 cents. The bottom line increased 38.7% from the prior-year quarter. On a GAAP basis, net income attributable to common shareholders was $132.2 million or 29 cents per share, unchanged from a year ago. Our estimate for the metric was $146.4 million.
Adjusted net revenues were $1.09 billion, falling marginally year over year. The top line marginally surpassed the Zacks Consensus Estimate of $1.08 billion. Adjusted operating expenses were $750.5 million, down 4.8% on a year-over-year basis. We expected the metric to be $787.9 million. The adjusted operating margin was 30.9%, up from 27.7% a year ago.
SEI Investments Company (SEIC - Free Report) second-quarter 2024 earnings of $1.05 per share surpassed the Zacks Consensus Estimate by a penny. The bottom line reflected a rise of 18% from the prior-year quarter's level. Net income was $139.1 million, up 17% from the year-ago quarter's level. Our estimate for the metric was $129.4 million. Total revenues were $519 million, up 6% year over year. However, the top line missed the Zacks Consensus Estimate of $524 million.
Total expenses were $382.5 million, up 2% year over year. Our estimate for the metric was $399.6 million. Operating income increased 21% year over year to $136.5 million. Our estimate for the metric was $119.9 million. As of Jun 30, 2024, AUM was $470.5 billion, reflecting a rise of 13% from the prior-year quarter's reported actuals. Client assets under administration were $1 trillion, up 16% year over year.
BlackRock, Inc. (BLK - Free Report) second-quarter 2024 adjusted earnings of $10.36 per share handily surpassed the Zacks Consensus Estimate of $9.96. The figure reflects a rise of 12% from the year-ago quarter. Shares of BLK are trending almost 1.5% higher in the pre-market trading session today.
Net income attributable to BlackRock (on a GAAP basis) was $1.5 billion, increasing 9% from the prior-year quarter. We had projected the metric to be $1.43 billion. Revenues (on a GAAP basis) in the quarter were $4.81 billion, lagging the Zacks Consensus Estimate of $4.86 billion. However, the figure increased 8% year over year. Total expenses amounted to $3.01 billion, rising 6%. Our estimate for expenses was $3.05 billion. Non-operating income (on a GAAP basis) was $214 million, down 15%. Our estimate for non-operating income was $216.8 million. BlackRock’s adjusted operating income was $1.88 billion, climbing 12% from the prior-year quarter.