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Voya (VOYA) Down 5.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Voya Financial Q2 Earnings Beat, Dividend Raised
Voya Financial, Inc. reported second-quarter 2024 adjusted operating earnings of $2.27 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line, however, decreased 1.7% year over year due to lower net underwriting gains in Health Solutions, partially offset by higher fee-based revenues in Wealth Solutions and Investment Management.
Behind the Headlines
Adjusted operating revenues amounted to $324 million, down 6.6% year over year. The top line missed the Zacks Consensus Estimate by 0.4%. Net investment income declined 5% year over year to $518 million. Meanwhile, fee income of $517 million increased 9.1% year over year.
Premiums totaled $790 million, up 16.7% from the year-ago quarter. Total benefits and expenses were $1.8 billion, up 9.3% from the year-ago quarter. As of Jun 30, 2024, VOYA’s assets under management, assets under administration and advisement totaled $861.3 billion.
Segmental Update
Wealth Solutions reported pre-tax adjusted operating earnings of $214 million, which jumped 23% year over year, driven by fee-based revenue growth aided by both equity market appreciation and stable fee margins, as well as lower administrative expenses. Total client assets as of Jun 30, 2024, were $581 billion, up 12% year over year, primarily due to higher equity market levels.
Health Solutions’ pre-tax adjusted operating earnings amounted to $60 million, which plunged 51.6% year over year, primarily due to lower stop loss net underwriting gains in the current period. Annualized in-force premiums and fees grew 16% to $3.9 billion. The strong increase reflects growth across all product lines due to solid sales and favorable retention.
Investment Management posted pre-tax adjusted operating earnings of $50 million, flat year over year. Higher net revenues due to positive capital markets and strong 2024 business momentum were offset by higher administrative expenses, a portion of which was not recurring. Net inflows were $4.8 billion, organically up 16% year over year, driven by Institutional US and Insurance channel flows and continued positive flows within Retail.
Corporate incurred a pre-tax adjusted operating loss, excluding Allianz's noncontrolling interest, of $53 million, flat year over year.
Financial Update
Voya Financial exited the quarter with cash and cash equivalents of $1.1 billion, which jumped 13.8% year over year. Total investments amounted to $35.2 billion, down 3.7% year over year.
Long-term debt as of Jun 30, 2024 was $395 million, up from $1 million at 2023 end. The financial leverage ratio (excluding accumulated other comprehensive income) deteriorated 20 basis points year over year to 28%.
As of Jun 30, 2024, book value per share (excluding AOCI) was $59.33, which increased 4.5% from 2013 end. Voya Financial exited the second quarter with more than $0.2 billion in excess capital.
Capital Deployment
The company returned $0.2 billion of capital in second-quarter 2024, including $174 million in share repurchases and $40 million in common stock dividends.
The board approved a 12.5% hike in its quarterly dividend to 45 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Voya has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Voya (VOYA) Down 5.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Voya Financial (VOYA - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Voya due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Voya Financial Q2 Earnings Beat, Dividend Raised
Voya Financial, Inc. reported second-quarter 2024 adjusted operating earnings of $2.27 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line, however, decreased 1.7% year over year due to lower net underwriting gains in Health Solutions, partially offset by higher fee-based revenues in Wealth Solutions and Investment Management.
Behind the Headlines
Adjusted operating revenues amounted to $324 million, down 6.6% year over year. The top line missed the Zacks Consensus Estimate by 0.4%. Net investment income declined 5% year over year to $518 million. Meanwhile, fee income of $517 million increased 9.1% year over year.
Premiums totaled $790 million, up 16.7% from the year-ago quarter. Total benefits and expenses were $1.8 billion, up 9.3% from the year-ago quarter.
As of Jun 30, 2024, VOYA’s assets under management, assets under administration and advisement totaled $861.3 billion.
Segmental Update
Wealth Solutions reported pre-tax adjusted operating earnings of $214 million, which jumped 23% year over year, driven by fee-based revenue growth aided by both equity market appreciation and stable fee margins, as well as lower administrative expenses. Total client assets as of Jun 30, 2024, were $581 billion, up 12% year over year, primarily due to higher equity market levels.
Health Solutions’ pre-tax adjusted operating earnings amounted to $60 million, which plunged 51.6% year over year, primarily due to lower stop loss net underwriting gains in the current period. Annualized in-force premiums and fees grew 16% to $3.9 billion. The strong increase reflects growth across all product lines due to solid sales and favorable retention.
Investment Management posted pre-tax adjusted operating earnings of $50 million, flat year over year. Higher net revenues due to positive capital markets and strong 2024 business momentum were offset by higher administrative expenses, a portion of which was not recurring. Net inflows were $4.8 billion, organically up 16% year over year, driven by Institutional US and Insurance channel flows and continued positive flows within Retail.
Corporate incurred a pre-tax adjusted operating loss, excluding Allianz's noncontrolling interest, of $53 million, flat year over year.
Financial Update
Voya Financial exited the quarter with cash and cash equivalents of $1.1 billion, which jumped 13.8% year over year. Total investments amounted to $35.2 billion, down 3.7% year over year.
Long-term debt as of Jun 30, 2024 was $395 million, up from $1 million at 2023 end. The financial leverage ratio (excluding accumulated other comprehensive income) deteriorated 20 basis points year over year to 28%.
As of Jun 30, 2024, book value per share (excluding AOCI) was $59.33, which increased 4.5% from 2013 end. Voya Financial exited the second quarter with more than $0.2 billion in excess capital.
Capital Deployment
The company returned $0.2 billion of capital in second-quarter 2024, including $174 million in share repurchases and $40 million in common stock dividends.
The board approved a 12.5% hike in its quarterly dividend to 45 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, Voya has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.