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Principal Financial (PFG) Up 9.6% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Principal Financial Group Inc (PFG - Free Report) . Shares have added about 9.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? 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.
Principal Financial Q4 Earnings Beat, Revenues Up Y/Y
Principal Financial Group, Inc.’s fourth-quarter 2016 operating net income of $1.27 per share beat the Zacks Consensus Estimate of $1.15 by 10.4%. The bottom line also improved 25% year over year.
The company’s investment performance remained strong. Moreover, the company expanded its solution set as well as strengthened relationships with customers and distributors in the quarter. The company also displayed a balanced approach to capital management.
Including net realized capital losses of $0.01 and other unfavorable adjustment of 17 cents, net income available to common stockholders was $1.09 per share, up 26% year over year.
Behind the Headlines
Operating revenues in the quarter increased 24.3% year over year to $3.6 billion.
Total expenses rose 24% year over year to $3.1 billion. This was primarily due to the increase in benefits, claims and settlement expenses, commission expenses, and compensation and other.
Principal Financial’s Asset Under Management (AUM) as of Dec 31, 2016 was a record $591.6 billion. The metric increased 12.2% from Dec 31, 2015.
As of Dec 31, 2016, book value per share was $37.90, up 8.3% year over year.
2016 Highlights
Operating income came in at $4.55 per share, up 6.8% from 2015.
Operating revenues were $12.4 billion, up 2.1% from 2015.
Segment Update
Retirement and Income Solution: Revenues surged almost 43% year over year to about $2 billion.
Operating earnings increased 13.3% year over year to $211.5 million.
Principal Global Investors: Revenues of $380.1 million climbed nearly 9.4% from the prior-year quarter.
Operating earnings rose 31.1% year over year to $133.7 million owing to higher management fees on increased AUM, higher performance fees and disciplined expense management.
Principal International: Revenues dipped 1.1% year over year to $312.3 million in the quarter.
Operating earnings declined 2% year over year to $66 million.
US Insurance Solution: Revenues increased 6.9% year over year to $928 million.
Operating earnings were $106.9 million, up 23.4% year over year.
Corporate: Revenues of $5.3 million compared favorably with ($18.3) million in the year-ago quarter.
Operating loss of $53.3 million was narrower than a loss of $54.8 million in the year-earlier quarter.
Dividend and Share Repurchase Update
Principal Financial paid a quarterly dividend of $465 million of common stock dividends. Also, the company bought back 6.2 million shares worth $257 million during 2016.
Furthermore, the company lowered debt by $94 million and invested $40 million for increased ownership in investment boutiques.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There have been two revisions lower for the current quarter.
At this time, Principal Financial's stock has a subpar score of 'D' on both growth and momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Principal Financial (PFG) Up 9.6% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Principal Financial Group Inc (PFG - Free Report) . Shares have added about 9.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? 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.
Principal Financial Q4 Earnings Beat, Revenues Up Y/Y
Principal Financial Group, Inc.’s fourth-quarter 2016 operating net income of $1.27 per share beat the Zacks Consensus Estimate of $1.15 by 10.4%. The bottom line also improved 25% year over year.
The company’s investment performance remained strong. Moreover, the company expanded its solution set as well as strengthened relationships with customers and distributors in the quarter. The company also displayed a balanced approach to capital management.
Including net realized capital losses of $0.01 and other unfavorable adjustment of 17 cents, net income available to common stockholders was $1.09 per share, up 26% year over year.
Behind the Headlines
Operating revenues in the quarter increased 24.3% year over year to $3.6 billion.
Total expenses rose 24% year over year to $3.1 billion. This was primarily due to the increase in benefits, claims and settlement expenses, commission expenses, and compensation and other.
Principal Financial’s Asset Under Management (AUM) as of Dec 31, 2016 was a record $591.6 billion. The metric increased 12.2% from Dec 31, 2015.
As of Dec 31, 2016, book value per share was $37.90, up 8.3% year over year.
2016 Highlights
Operating income came in at $4.55 per share, up 6.8% from 2015.
Operating revenues were $12.4 billion, up 2.1% from 2015.
Segment Update
Retirement and Income Solution: Revenues surged almost 43% year over year to about $2 billion.
Operating earnings increased 13.3% year over year to $211.5 million.
Principal Global Investors: Revenues of $380.1 million climbed nearly 9.4% from the prior-year quarter.
Operating earnings rose 31.1% year over year to $133.7 million owing to higher management fees on increased AUM, higher performance fees and disciplined expense management.
Principal International: Revenues dipped 1.1% year over year to $312.3 million in the quarter.
Operating earnings declined 2% year over year to $66 million.
US Insurance Solution: Revenues increased 6.9% year over year to $928 million.
Operating earnings were $106.9 million, up 23.4% year over year.
Corporate: Revenues of $5.3 million compared favorably with ($18.3) million in the year-ago quarter.
Operating loss of $53.3 million was narrower than a loss of $54.8 million in the year-earlier quarter.
Dividend and Share Repurchase Update
Principal Financial paid a quarterly dividend of $465 million of common stock dividends. Also, the company bought back 6.2 million shares worth $257 million during 2016.
Furthermore, the company lowered debt by $94 million and invested $40 million for increased ownership in investment boutiques.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There have been two revisions lower for the current quarter.
Principal Financial Group Inc Price and Consensus
Principal Financial Group Inc Price and Consensus | Principal Financial Group Inc Quote
VGM Scores
At this time, Principal Financial's stock has a subpar score of 'D' on both growth and momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.