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Principal Financial (PFG) Q4 Earnings & Revenues Top Estimates

Principal Financial Group, Inc.’s PFG fourth-quarter 2021 operating net income of $1.85 per share beat the Zacks Consensus Estimate by 13.5% and grew 25% year over year.

Principal Financial witnessed higher revenues across most of its business lines and higher assets under management (AUM), which were offset by higher expenses.

Full-Year Highlights       

For 2021, Principal Financial reported an operating net income of $6.77 per share, which beat the Zacks Consensus Estimate by 3.3%. Moreover, it increased 37% year over year.

Total operating revenues of $14.26 billion beat the consensus mark by 1.2%. However, it decreased 1.2% year over year.    

Behind the Headlines   

Operating revenues increased 11.7% year over year to nearly $4.1 billion. The upside was due to higher fees and other revenues, net investment income and premiums and other considerations. The top line beat the Zacks Consensus Estimate by 9.9%.

Total expenses increased 9.7% year over year to $3.5 billion due to higher operating expenses and benefits, claims and settlement expenses.

Principal Financial’s AUM as of Dec 31, 2021 was $713.9 billion, up 7.4% year over year.

Segment Update

Retirement and Income Solution: Revenues increased 6.8% year over year to about $1.9 billion.

Pre-tax operating earnings increased 23.6% to $329.8 million on account of improved performance at Retirement and Income Solution- Fee and Spread business.

Principal Global Investors: Revenues of $493.9 million were up 19.7% from the prior-year quarter.

Operating earnings increased 27% year over year to $192.8 million, primarily due to higher operating revenues less pass-through expenses, partially offset by higher operating expenses.

Principal International: Revenues increased 39% year over year to $409.5 million in the quarter.

Operating earnings increased 77% to $105.2 million due to higher combined net revenues.
U.S. Insurance Solution: Revenues grew 6.3% year over year to $1.2 billion.

Operating earnings of $97.4 million increased 8.8% year over year due to improved performance at the Specialty Benefits Insurance business.

Corporate: Operating loss of $94.4 million was wider than the $81.6 million loss incurred a year ago due to higher operating expenses.

Financial Update

As of Dec 31, 2021, cash and cash equivalents were $2.3 billion, up 18.2% year over year.

At the fourth-quarter end, debt was $4.3 billion, up 0.02%.

As of Dec 31, 2021, book value per share (excluding AOCI other than foreign currency translation adjustment) was $49.27, up 4.7% year over year.

Capital Deployment

Principal Financial paid out $168.5 million in dividends and bought back shares worth $352.1 million in the fourth quarter.

The board of directors approved a fourth-quarter dividend of 64 cents per share, up 14% year over year.

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 Investment Managers

Affiliated Managers Group Inc.’s AMG fourth-quarter 2021 economic earnings of $6.10 per share handily surpassed the Zacks Consensus Estimate of $5.81 and jumped 44.5% year over year. Total revenues in the reported quarter rose 24.8% year over year to $691.8 million and beat the Zacks Consensus Estimate of $658.67 million.

Affiliated Managers’ adjusted EBITDA was $356.8 million, jumping 39.8% from the year-ago quarter. As of Dec 31, 2021, the total AUM was $813.8 billion, up 13.6% year over year. Net client cash outflows in the quarter were $6.2 billion.

Blackstone’s BX distributable earnings of $1.71 per share for the quarter comfortably surpassed the Zacks Consensus Estimate of $1.34 and reflected a rise of 51% from the prior-year quarter.

Blackstone’s total quarterly segment revenues were $4.46 billion, up 59% year over year. The reported figure surpassed the Zacks Consensus Estimate of $3.10 billion. On a GAAP basis, revenues were $5.76 billion, up 59% from the prior-year quarter.

SEI Investments Co.’s SEIC fourth-quarter 2021 earnings of $1.03 per share surpassed the Zacks Consensus Estimate of 97 cents and reflected 6.2% growth from the prior-year quarter.

SEI Investments’ total quarterly revenues were $501.7 million, up 13.1% year over year. The upswing reflects an increase in asset management, administration and distribution fees, and information processing and software servicing fees. The top line outpaced the Zacks Consensus Estimate of $487 million.

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