Principal Financial(US:PFG)2025-10-29 20:00Financial Performance - As of September 30, 2025, the company reported a pre-tax operating earnings increase of $12.0 million in the Retirement and Income Solutions segment compared to a loss of $16.7 million in the same period of 2024[463]. - The Benefits and Protection segment reported a pre-tax operating loss of $79.1 million for the three months ended September 30, 2025, compared to a loss of $86.4 million in 2024[463]. - For the three months ended September 30, 2025, total revenues increased by $670.0 million to $3,681.6 million compared to $3,011.6 million in the same period of 2024[1]. - Net income attributable to Principal Financial Group, Inc. for the three months ended September 30, 2025, was $213.8 million, a significant increase from a net loss of $220.0 million in the same period of 2024[1][2]. - For the nine months ended September 30, 2025, net income attributable to Principal Financial Group, Inc. increased by $158.1 million compared to the same period in 2024, driven by various one-time impacts and actuarial updates[6]. - Total revenues for the nine months ended September 30, 2025, decreased by $326.9 million to $11,048.8 million compared to $11,375.7 million in 2024[1][7]. Operating Expenses - Operating expenses increased by $38.3 million to $1,374.2 million for the three months ended September 30, 2025, primarily due to higher nondeferrable commission expenses and compensation costs[1][4]. - Total expenses for the three months ended September 30, 2025, increased by $24.9 million to $1,174.0 million compared to $1,149.1 million in 2024[1]. - Operating expenses for the Retirement and Income Solutions segment increased by $10.6 million primarily due to higher staff-related costs[494]. Investment Performance - The company’s investment portfolio is subject to risks that may diminish the value of invested assets, potentially reducing sales, revenues, and net income[457]. - The company experienced a decrease in credit losses on commercial mortgage loans, from $93.8 million in 2024 to $14.5 million in 2025[574]. - Net investment income for the three months ended September 30, 2025, was $1,200.5 million, an increase from $1,167.6 million in the same period of 2024[570]. - Net investment income for the nine months ended September 30, 2025, was $3,529.0 million, compared to $3,325.9 million for the same period in 2024[570]. - The company had $2,675.2 million of cash and liquid assets held in its holding companies and other subsidiaries as of September 30, 2025[538]. Market and Economic Factors - Fluctuations in foreign currency exchange rates negatively impacted pre-tax operating earnings by $8.8 million for the nine months ended September 30, 2025[465]. - The effective income tax rate decreased to 6% for the three months ended September 30, 2025, down from 34% in the same period of 2024, due to an increase in pre-tax income[1][5]. Segment Performance - The Principal Asset Management segment experienced a decrease in pre-tax operating earnings of $21.1 million for the nine months ended September 30, 2024, with no earnings reported for 2025[463]. - Retirement and Income Solutions segment net revenue for Q3 2025 was $751.7 million, an increase of 10.7% from $679.4 million in Q3 2024[491]. - The Principal Asset Management segment's AUM at the end of Q3 2025 was $752.3 billion, up from $711.1 billion at the end of Q3 2024, marking a growth of 5.8%[501]. - The Benefits and Protection segment's growth is driven by premiums and fees from specialty benefits insurance and traditional life insurance products[506]. Debt and Equity - The company repaid $400.0 million of long-term debt that matured during 2025, contributing to an increase in cash used in financing activities to $833.2 million from $48.5 million in 2024[542]. - The debt to equity ratio improved to 34% as of September 30, 2025, down from 37% as of December 31, 2024[554]. - Total stockholders' equity attributable to PFG increased to $11,665.5 million as of September 30, 2025, compared to $11,086.4 million as of December 31, 2024[554]. Asset Management - Total consolidated assets as of September 30, 2025, were $334,491.8 million, with invested assets amounting to $107,608.1 million[566]. - The total invested assets amounted to $83,655.5 million, an increase from $80,073.4 million as of December 31, 2024, representing a growth of 3.3%[589]. - The company actively manages credit risk through industry, issuer, and asset class diversification, with considerable resources devoted to credit analysis for each new investment[579]. Miscellaneous - The company maintains a strong liquidity position with approximately $14.0 billion, or 99%, of institutional guaranteed investment contracts not redeemable prior to maturity[5]. - The company is closely monitoring its liquidity and believes it can meet all long-term obligations to customers, policyholders, and debt holders[5].