Principal Financial Group (PFG) Q2 2024 earnings summary

Executive summary

• Q2 2024 non-GAAP operating earnings were $386 million ($1.63 per diluted share), up 3%-7% year-over-year, with strong growth in Retirement and Specialty Benefits, and a 6% net revenue increase.

• Net income attributable to the company was $353.1 million ($1.49 per diluted share), down from $388.8 million in Q2 2023, mainly due to a one-time $158.1 million YRT reinsurance impact.

• Total company AUM reached $699 billion, with assets under administration at $1.6 trillion; AUM grew 4%-11% year-over-year, but was impacted by $9 billion in FX headwinds.

• Returned $415 million to shareholders in Q2 2024 ($250 million in share repurchases, $165 million in dividends), and raised the dividend for the fifth consecutive quarter.

• Acquired Ascensus's ESOP business, expanding SMB retirement offerings and solidifying a 30% U.S. market share.

Financial highlights

• Reported net income was $353 million; non-GAAP operating earnings were $386 million, with non-GAAP EPS up 3%-7% to $1.63.

• Excluding significant variances, non-GAAP operating earnings were $415 million ($1.76 per share), up 4% year-over-year; one-time state tax and severance costs impacted EPS by $0.09.

• Book value per common share was $47.41, up from $46.18 at year-end 2023.

• Premiums and other considerations rose to $1.93 billion, mainly due to higher group annuity sales.

• Net investment income increased to $1.09 billion, reflecting higher yields and average invested assets.

Outlook and guidance

• Full-year 2024 non-GAAP EPS growth expected at 9%-12%, supported by business fundamentals, seasonality, and capital flexibility.

• Capital deployment for 2024 targeted at $1.5-$1.8 billion, including $800 million-$1.1 billion in share repurchases.

• Free capital flow conversion targeted at 75%-85%, with a 40% dividend payout ratio.

• Management remains confident in liquidity and ability to meet long-term obligations.