Principal Financial Group (PFG) Q3 2024 earnings summary

Executive summary

• Reported a GAAP net loss of $220 million for Q3 2024, primarily due to a $1.7 billion negative change in the fair value of funds withheld embedded derivatives and losses from exited business; non-GAAP operating earnings were $412 million ($1.76 per share), or $480 million ($2.05 per share) excluding significant variances, up 12% year-over-year.

• Net revenue grew 5% year-over-year, with strong segment contributions and AUM reaching $741 billion, up 14% year-over-year and 6% sequentially.

• Returned $416 million to shareholders in Q3 2024, including $251 million in share repurchases and $165 million in dividends; raised quarterly dividend to $0.73 per share, a 9–10% increase year-over-year.

• Assets under administration reached $1.7 trillion.

• Completed significant actuarial assumption reviews and YRT reinsurance transactions, resulting in notable one-time impacts.

Financial highlights

• Non-GAAP operating earnings were $412 million (-2% year-over-year); excluding significant variances, earnings were $480 million (+7%).

• Non-GAAP EPS was $1.76 (+2% year-over-year); excluding significant variances, EPS was $2.05 (+12%).

• Net investment income rose to $1,167.6 million, reflecting higher yields and invested assets.

• Effective tax rate at lower end of 17%-20% guidance; GAAP effective tax rate was 34% due to lower pre-tax income.

• Non-GAAP operating ROE was 12.9% (13.5% excluding actuarial review impacts); debt-to-capital ratio at 22%.

Outlook and guidance

• Full-year 2024 non-GAAP EPS growth expected at 9%-12% year-over-year, with capital deployment guidance of $1.5-$1.8 billion, including $800 million-$1.1 billion in share repurchases.

• Management remains confident in achieving best full-year retention rates in retirement over past five years and strong business fundamentals.

• Forward-looking statements caution that actual results may differ due to risks and uncertainties, including market and regulatory factors.