Principal Financial Group, Inc.’s PFG third-quarter 2024 operating net income of $1.76 per share missed the Zacks Consensus Estimate by 12.4%. The bottom line increased 2.3% year over year.

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Operating revenues increased 5.5% year over year to $3.6 billion due to increased fees and other revenues and net investment income. The metric missed the Zacks Consensus Estimate by 6.3%.

Principal Financial witnessed solid performance across the Retirement and Income Solution and Principal International segments and improved assets under management (AUM) and mixed performances in the other segments, offset by 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 10.4% year over year to $3.3 billion due to higher operating expenses, benefits, claims and settlement expenses and market risk benefit remeasurement (gain) loss. The figure was lower than our estimate of $3.4 billion.

As of Sept. 30, 2024, Principal Financial’s AUM amounted to $741 billion, which is included in assets under administration of $1.7 trillion.

Segment Update

Retirement and Income Solution: Revenues increased 2.1% year over year to $1.7 billion because of higher fees and other revenues and net investment income. The figure missed our estimate of $1.8 billion.

Pre-tax operating earnings increased 19% year over year to $246.1 million. The figure missed our estimate of $711 million.

Principal Global Investors: Revenues of $431 million were up 1.5% from the prior-year quarter due to higher fees and other revenues and net investment income. The figure beat our estimate of $425.7 million. 

Pre-tax operating earnings decreased 2% year over year to $147.96 million due to muted growth in operating revenues and less pass-through expenses due to strong performance fees in the prior-year quarter. The figure missed our estimate of $150.5 million.

Principal International: Revenues increased 26% year over year to $314.8 million in the quarter due to higher premiums and other considerations and net investment income. The figure missed our estimate of $363.2 million.
Pre-tax operating earnings increased 71% year over year to $120.8 million. The figure missed our estimate of $175.5 million.

Benefits and Protection: Revenues increased 5.4% year over year to $1.2 billion owing to higher premiums and other considerations, net investment income, fees and other revenues. The metric matched our estimate.

Pre-tax operating earnings of $64.6 million decreased 62% year over year. The metric missed our estimate of $153.3 million.

Specialty Benefits: Revenues increased 6.4% year over year to $868.9 million owing to higher premiums and other considerations and net investment income. The metric missed our estimate of $894.6 million.

Pre-tax operating earnings of $101.7 million decreased 31% year over year. The metric missed our estimate of $163.7 million.

Life Insurance: Revenues increased 2.9% year over year to $344.8 million owing to higher fees and other revenues and net investment income. The metric beat our estimate of $317.8 million.

Pre-tax operating losses were $37.3 million against the year-ago quarter’s earnings of $21.2 million. The figure was wider than our estimate of a loss of $10.4 million. 

Corporate: Pre-tax operating losses of $79.4 million were narrower than the loss of $114.8 million incurred a year ago. This decrease was due to lower operating expenses. The figure was narrower than our estimate of a loss of $102.3 million.