Principal Financial Group, Inc. PFG is slated to report second-quarter 2024 earnings on Jul 25, after market close. PFG delivered a negative earnings surprise in the last reported quarter.
Factors at Play
Principal Financial’s second-quarter results are likely to reflect strong sales, higher yields and average invested assets in fixed maturities and higher sales of single premium group annuities.
The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $3.78 billion, indicating an improvement of 7.9% from the year-ago quarter’s reported figure.
Premiums and other considerations are likely to have increased for the Retirement and Income Solutions segment, owing to higher sales of single premium group annuities with life contingencies. Premiums and other considerations are likely to have increased for the Benefits and Protection segment due to growth in the Specialty Benefits business.
Revenues in the Retirement and Income Solutions segment are likely to have increased due to growth in fee revenues stemming from an increase in average monthly account values, which resulted from more favorable financial markets and higher variable investment income.
Investment income is expected to have benefited from higher income associated with derivatives in fair value hedges and higher yields and average invested assets in fixed maturities and cash in U.S. operations. However, lower inflation-based investment returns on Latin America’s average invested assets, foreign currency headwinds and lower income from equity method investments in Brazil are expected to have brought down the figure in the second quarter. The Zacks Consensus Estimate for net investment income is pegged at $1 billion, suggesting an increase of 11.3% from the year-ago reported figure. We expect investment income to increase 0.8% to $995.7 million.
Assets under management are likely to have benefited from strong sales and favorable market performance.
Expenses are likely to have increased due to higher benefits, claims and settlement expenses, dividends to policyholders and operating expenses. We expect total expenses to be $3.2 billion.
Operating expenses are likely to have improved due to higher amounts credited to employee accounts in a nonqualified defined contribution pension plan and higher compensation costs. We expect operating expenses to be $1.2 billion.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.87 per share, suggesting an increase of 22.2% from the prior-year quarter’s reported figure.
What Our Quantitative Model Predicts
Our proven model does not predict an earnings beat for Principal Financial this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case here, as you can see below.
Earnings ESP: Principal Financial has an Earnings ESP of -0.47%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Principal Financial Group, Inc. Price and EPS Surprise
Principal Financial Group, Inc. price-eps-surprise | Principal Financial Group, Inc. Quote
Zacks Rank: PFG currently carries a Zacks Rank #3.
Stocks to Consider
Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:
Hamilton Lane Inc. HLNE has an Earnings ESP of +2.14% and sports a Zacks Rank #1 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $1.09 per share, indicating a year-over-year increase of 15.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
HLNE’s earnings beat estimates in two of the last four quarters and missed in the other two.
T. Rowe Price Group, Inc. TROW has an Earnings ESP of +0.39% and flaunts a Zacks Rank #1 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $2.25 per share, indicating a year-over-year increase of 11.3%.
TROW’s earnings beat estimates in each of the last four reported quarters.
Victory Capital Holdings, Inc. VCTR has an Earnings ESP of +1.53% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $1.31 per share, indicating a year-over-year increase of 18%.
VCTR’s earnings beat estimates in three of the last four quarters and matched in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
