Equitable Holdings Q4 Earnings Miss, Revenues Up Y/Y on Segment Strength

Core Viewpoint - Equitable Holdings, Inc. (EQH) reported mixed fourth-quarter 2024 results, with a 3.4% increase in shares post-reporting, despite challenges in investment results. Revenue growth in key segments, particularly Asset Management and Wealth Management, helped mitigate the downside [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were $1.57, missing the Zacks Consensus Estimate by 2.5%, but representing an 18% year-over-year increase [2]. - Operating revenues rose 11.3% year over year to $4 billion, although this figure was 1% below consensus estimates [2]. - Policy charges and fee income increased by 6.5% year over year to $638 million, while premiums improved by 3.9% to $292 million. Net investment income decreased by 1.7% year over year to $1.2 billion [3]. Expense and Income Analysis - Total benefits and other deductions fell by 18.9% year over year to $2.4 billion, significantly influenced by a negative change in market risk benefits from the previous year [4]. - Other operating costs and expenses decreased by 8.2% year over year, leading to a pre-tax income of $1.2 billion, compared to a loss of $817 million in the prior-year quarter [4]. Asset Management and Growth - Total assets under management (AUM) reached $918.8 billion at the end of Q4, marking an 8.9% year-over-year increase. Total AUM/A grew by 10% year over year to $1 trillion [5]. Segment Performance - Individual Retirement segment revenues rose 24.9% year over year to $978 million, exceeding the consensus estimate [6]. - Group Retirement revenues climbed 22% year over year to $305 million, also beating consensus expectations [6]. - Asset Management revenues increased by 16.3% year over year to $1.25 billion, with pre-tax income soaring 44.4% [7]. - Wealth Management segment revenues advanced 17.9% year over year to $481 million, although pre-tax income dipped slightly [8]. Financial Position - As of December 31, 2024, total investments and cash equivalents stood at $123.4 billion, an 11.8% increase from the end of 2023. Total assets rose by 6.9% to $295.9 billion [9]. - Long-term debt was reported at $3.8 billion, showing a slight increase from the previous year [9]. - Total equity decreased by 21.5% from the end of 2023 to $3.4 billion [10]. Capital Return Strategy - Equitable Holdings returned $335 million to shareholders in Q4, comprising a $75 million cash dividend and $260 million in share repurchases, with a payout ratio target of 60-70% of non-GAAP operating earnings for 2023-2027 [11]. Full-Year Overview - For the full year 2024, adjusted EPS was $5.93, up 29.2% year over year, with total revenues of $12.4 billion, reflecting an 18.1% increase [12]. - Policy charges and fee income grew by 4.8% year over year to $2.5 billion, while premiums increased by 5.3% to $1.2 billion [12]. - Pre-tax income nearly tripled year over year to $2.1 billion [12]. Future Outlook - The company aims to generate cash in the range of $1.6-$1.7 billion for 2025 and maintains a target of $2 billion in annual cash generation from 2023 to 2027. Non-GAAP operating EPS is expected to grow at a CAGR of 12-15% during the same period [13].