Principal Financial Group (PFG) Q2 2024 earnings summary

Executive summary

• Non-GAAP operating earnings for Q2 2024 were $386 million ($1.63 per diluted share), up 3% year-over-year, with EPS growth driven by 6% net revenue growth and favorable markets.

• Net income attributable to the company was $353.1 million, down from $388.8 million in Q2 2023, primarily due to a $158.1 million one-time unfavorable impact from YRT Reinsurance Transactions.

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

• Assets under management reached $699 billion, with foreign currency translation headwinds impacting AUM by $9 billion in the quarter.

• Acquired Ascensus's ESOP business, becoming the #1 ESOP provider in the U.S. with a 30% market share.

Financial highlights

• Reported net income was $353 million; excluding exited business, net income was $356 million.

• Non-GAAP operating ROE was 13.1%, up 80 bps year-over-year, trending toward the 14%-16% target.

• Excluding significant variances, non-GAAP operating earnings were $415 million ($1.76 per share), up 4% year-over-year.

• Premiums and other considerations rose to $1.93 billion in Q2 2024, mainly due to higher sales of single premium group annuities.

• Net investment income increased to $1.09 billion from $988.1 million year-over-year.

Outlook and guidance

• Full-year EPS growth guidance of 9%-12% reaffirmed, with expectations for strong second-half performance.

• Guidance implies average EPS of slightly over $2 per quarter in the next two quarters, supported by seasonality, business growth, and reduced share count.

• Confident in delivering on revenue growth and margin guidance for the full year.

• Management expects continued growth in Retirement and Income Solutions and Principal Asset Management, supported by favorable market conditions.

• Strategic focus on integrated product portfolio and distribution relationships expected to drive continued value.