Principal Financial Group, Inc
) reported fourth-quarter 2012 operating earnings of 82 cents per
share. The reported result exceeded the Zacks Consensus Estimate
by 8 cents and improved 24% year over year. Operating income was
$243.9 million in the quarter, up 21% year over year.
ASSURED GUARNTY (AGO): Free Stock Analysis
CNO FINL GRP (CNO): Free Stock Analysis
PRINCIPAL FINL (PFG): Free Stock Analysis
RADIAN GRP INC (RDN): Free Stock Analysis
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Including net realized capital gains of $0.5 million and an
unfavorable after tax adjustment due to expenses incurred for
extinguishing debt, net income available to common stockholders
was $218.6 million or 74 cents per share, compared with $148.5
million or 48 cents per share a year ago.
The prior-year quarter included net realized capital losses of
$53.6 million or 18 cents per share and other unfavorable
after-tax adjustments of $0.3 million.
Operating revenues in the fourth quarter improved 9% to $2.3
billion. The rise was primarily due to an increase in premiums
and other considerations and fees, and other revenues, as well as
higher net investment income. Revenue breezed past the Zacks
Consensus Estimate of $2.2 billion.
Total expenses escalated 7% year over year to $2.0 billion.
Higher benefits, claims and settlement expenses, commissions,
depreciation and amortization, compensation, interest expense
primarily contributed to the escalation.
Assets under management were $403.0 billion as of Dec 31, 2012,
up 20% year over year.
Book value per share as of Dec 31, 2012, stood at $29.20, up 7%
year over year.
Full Year Highlights
Operating earnings came in at $2.69 per share, higher than the
Zacks Consensus Estimate of $2.61 and up 1.1% over 2011.
Including net realized capital gains of 13 cents and an
unfavorable after tax adjustment of 25 cents, net income
available to common stockholders was $2.57 per share, compared
with $1.95 share a year ago.
Operating revenues increased nearly 11% to $9.2 billion.
Retirement and Investor Services
: Revenues in the quarter augmented by nearly 11% year over year
to $1.13 billion, fueled by higher fee revenue in the
accumulations businesses and higher premiums in the guaranteed
Operating earnings increased to $152.3 million in the quarter
from $124.5 million in the fourth quarter of 2011.
Principal Global Investors
: Revenues in the quarter were $168 million, 11% higher than the
Operating earnings improved 50% year over year to $26.2 million.
The improvement was primarily due to an increase in assets under
management as well as one-time acquisitions costs incurred in the
: Revenues were $265.8 million in the quarter, up from $255.6
million in the prior-year quarter, attributable to an increase in
assets under management.
Operating earnings waned to $45.1 million from $50.1 million in
the year-ago quarter.
US Insurance Solution
: Revenues improved to $779.7 million in the reported quarter
from $737.9 million in the year-ago quarter.
Operating income was $59.4 million in the reported quarter, up
from $52.8 million in the year-ago quarter.
: Operating losses narrowed to $39.1 million from a loss of $43.1
million recorded in the year-ago quarter.
Dividend and Share Repurchase Update
The board of directors declared a quarterly dividend of 23 cents
per share, representing an increase of 10%. The dividend will be
payable on Mar 29, 2013 to shareholders of record as of Mar 11,
Principal Financial repurchased 9.9 million shares at an average
price of $25.92 per share in 2012.
The company's sound capital position and financial liquidity are
supportive of its expansion policies in the emerging markets as
these offer ample growth opportunities. It expects to deploy
$400-$600 million in 2013. Also, Principal has been increasing
its focus on fee-based business that allows the company to return
more earnings to shareholders.
In order to widen its presence in the emerging marketplace,
Principal Financial initiated a bid to acquire Chile-based
leading pension manager AFP Cuprum S.A. Principal Financial
already has operations in the emerging markets of Brazil, Chile
and Mexico and this acquisition will give it a competitive
advantage. PFG, to this point, has asset management and mutual
funds businesses in China and India.
Principal Financial presently carries a Zacks Rank #3 (Hold).
Among other multi-line insurers such as
Radian Group Inc
Assured Guaranty Ltd
), both carrying a Zacks Rank #1 (Strong Buy), and
CNO Financial Group, Inc
), holding a Zacks Rank #2 (Buy), are yet to announce their