Principal Financial Group, Inc. PFG is slated to report first-quarter 2024 earnings on Apr 25, after market close. PFG delivered an earnings surprise in two of the last four reported quarters and missed twice, the average being 0.04%.

Factors at Play

Principal Financial’s first-quarter results are likely to reflect higher average invested assets in fixed maturities, favorable markets, increased sales of single premium group annuities, and favorable equity and fixed-income markets.

The Zacks Consensus Estimate for first-quarter 2024 revenues is pegged at $3.68 billion, indicating an improvement of 6.8% 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.

Revenues in the Retirement and Income Solutions segment are likely to have increased due to the growth in the business and strong revenue retention, higher net investment income, as well as favorable markets.

Investment income is expected to have benefited from higher yields and average invested assets in fixed maturities and cash due to foreign currency tailwinds. However, lower income associated with derivatives in fair value hedges, a decline in value-add real estate sales in the U.S. operations and a fall in inflation-based investment returns on Latin America’s average invested assets are expected to have brought down the figure in the first quarter. The Zacks Consensus Estimate for net investment income is pegged at $1 billion, suggesting an increase of 11.2% from the year-ago reported figure. We expect investment income to increase 0.8% to $994 million.

Assets under management are likely to have benefited from favorable equity and fixed-income markets, positive net cash flow as well as favorable impacts from foreign currency.

Expenses are likely to have increased due to higher reserves, stemming from higher sales of single premium group annuities with life contingencies and operating expenses. We expect total expenses to be $2.7 billion.

Operating expenses are likely to have increased due to higher compensation costs and an increase in amounts credited to employee accounts in a nonqualified defined contribution pension plan. We expect operating expenses to be $1.1 billion.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.74 per share, suggesting an increase of 17.5% 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 -0.17%. 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 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:

AllianceBernstein Holding L.P. AB has an Earnings ESP of +1.91% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at 70 cents, indicating a year-over-year increase of 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.

AB’s earnings beat estimates in three of the last four quarters and missed in the other one.

Victory Capital Holdings, Inc. VCTR has an Earnings ESP of +1.32% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at $1.21 per share, indicating a year-over-year increase of 12%.

VCTR’s earnings beat estimates in two of the last four quarters and matched in the other two.

Virtus Investment Partners, Inc. VRTS has an Earnings ESP of +0.06% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at $5.41 per share, indicating a year-over-year increase of 28.8%.

VRTS’ earnings beat estimates in three of the last four quarters and missed in the other one.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Principal Financial Group, Inc. (PFG):Free Stock Analysis Report

AllianceBernstein Holding L.P. (AB):Free Stock Analysis Report

Virtus Investment Partners, Inc. (VRTS):Free Stock Analysis Report

Victory Capital Holdings, Inc. (VCTR):Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research