Principal Financial Group, Inc.
) reported second-quarter 2013 operating net earnings of 91 cents
per share. The reported results exceeded the Zacks Consensus
Estimate by 11% and improved 30% year over year. Operating income
was $271.4 million in the quarter, up 29% year over year.
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A surge in fees and other revenues along with higher premiums and
other considerations more than offset the impact from lower net
investment income and escalation in expenses. In addition, a
lower share count buoyed Principal Financial's bottom line.
Including net realized capital losses of $47.6 million or 16
cents, and other unfavorable adjustments of $4 million, net
income available to common stockholders was $222.3 million or 75
cents per share, compared with $167.6 million or 56 cents per
share a year ago.
The prior-year quarter included net realized capital losses of 13
cents and other unfavorable after-tax adjustments of 1 cent.
Operating revenues of Principal Financial in the second quarter
improved 8% to $2.31 billion. The rise was primarily due to an
increase in premiums and other considerations and fees and other
revenues. Revenues marginally fell short of the Zacks Consensus
Estimate of $2.34 billion.
Total expenses incurred by Principal Financial escalated 5.2%
year over year to $1.9 billion. Higher commissions, depreciation
and amortization, compensation, interest expense primarily
contributed to the escalation.
Principal Financial's assets under management were $450.6 billion
as of Jun 30, 2013, up 22.7% year over year.
Book value per share as of Jun 30, 2013, stood at $29.81, inching
up 0.03% year over year.
Retirement and Investor Services
: Revenues in the quarter augmented nearly 6.3% year over year to
Operating earnings increased 21.5% year over year to $172.3
million in the quarter.
Principal Global Investors
: Revenues in the quarter were $168.2 million, 19% higher than
the prior-year period, driven by higher management fees due to
Operating earnings improved 59% year over year to $29 million.
The increase was primarily due to improved revenues and enhanced
: Revenues were $338 million in the quarter, up 25% year over
Operating earnings surged 85% year over year to $26.8 million in
the quarter, attributable to the benefit from the Cuprum
US Insurance Solution
: Revenues were $773 million in the reported quarter, up 2.9%
year over year.
Operating income was $47.2 million in the reported quarter, down
10% year over year.
: Operating losses widened to $35.4 million from a loss of $30.7
million recorded in the year-ago quarter.
The board of directors of Principal Financial declared a
quarterly dividend of 26 cents per share, representing an
increase of 13%. The dividend will be payable on Sep 27, 2013 to
shareholders of record as of Sep 5, 2013.
Principal Financial also paid a quarterly dividend of 23 cents on
Results of Few Other Investment Managers
Ameriprise Financial, Inc.
) reported second-quarter operating earnings of $1.69 per share.
The results surpassed the Zacks Consensus Estimate of $1.62 as
well as the year-ago earnings of $1.13.
) second-quarter 2013 adjusted earnings came in at $4.15 per
share. The results surpassed the Zacks Consensus Estimate of
$3.82 as well as the year-ago earnings of $3.10.
The Blackstone Group L.P
) reported second-quarter earnings of 62 cents per share,
surpassing the Zacks Consensus Estimate of 52 cents. It also
improved substantially from 19 cents earned in the year-ago
Increased focus on fee-based revenue sources aided Principal
Financial to earn steadily and return capital to its shareholders
through dividends or deploy them in strategic acquisitions.
The approval of a 13% dividend hike further substantiates it.
Its inorganic growth story also looks quite impressive. Principal
Global Investors, LLC, the investment arm of Principal Financial
Group, agreed to purchase 55% shares of Liongate Capital
Management in an effort to expand its alternative investment
Principal Financial presently carries a Zacks Rank #3 (Hold).