Principal Financial Group (PFG) Q3 2024 earnings summary

Executive summary

• Reported GAAP net loss of $220 million, or $0.95 per diluted share, primarily due to losses from exited businesses and derivative impacts; non-GAAP operating earnings were $412 million ($1.76 per share), and adjusted EPS excluding significant variances was $2.05, 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.

• Returned $416 million to shareholders in Q3 2024, including $251 million in share repurchases and $165 million in dividends; quarterly dividend raised to $0.73 per share.

• Operating revenues increased in Retirement and Income Solutions and Benefits and Protection segments, but were offset by higher expenses and actuarial assumption updates.

• Completed significant YRT reinsurance transactions in Q2 2024, impacting results through one-time effects on reserves and remeasurement losses.

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 the lower end of 17%-20% guidance; Q3 2024 effective tax rate was 34% due to lower pre-tax income.

• Assets under management increased to $741 billion, with assets under administration at $1.7 trillion.

Outlook and guidance

• Full-year 2024 non-GAAP EPS growth expected at 9%-12%, with capital deployment guidance of $1.5-$1.8 billion.

• Management remains confident in achieving best full-year retention rates in retirement over the past five years.

• Expect continued strong free cash flow in Q4, maintaining capital targets and robust capital position.

• Management expects continued volatility in net income due to market-driven changes in derivative values and market risk benefits.

• Forward-looking statements caution that actual results may differ due to risks and uncertainties.