Principal Financial Misses Q1 Earnings, Unveils 7% Dividend Hike

Core Insights - Principal Financial Group, Inc. (PFG) reported first-quarter 2025 operating net income of $1.81 per share, which missed the Zacks Consensus Estimate by 2.1%, but increased 10% year over year [1] - The company experienced a 5.5% year-over-year increase in operating revenues to $4 billion, driven by higher premiums, fees, and net investment income, surpassing the Zacks Consensus Estimate by 0.9% [1][2] Financial Performance - Total expenses rose 7% year over year to $3.7 billion, attributed to higher benefits, claims, and settlement expenses, but was lower than the estimated $4.1 billion [2] - As of March 31, 2025, assets under management (AUM) reached $717.9 billion, reflecting a 1.3% year-over-year increase [2] Segment Performance - Retirement and Income Solution: Revenues increased 7.4% year over year to $2 million, with pre-tax operating earnings rising 8% to $283.7 million, although below the estimate of $315.1 million [3] - Investment Management: Revenues grew 4.2% year over year to $453.7 million, but pre-tax operating earnings decreased 5% to $116.3 million, missing the estimate of $155.9 million [4] - International Pension: Revenues rose 6.2% year over year to $237.8 million, with pre-tax operating earnings climbing 10% to $71.2 million, exceeding the estimate of $63.1 million [5] - Specialty Benefits: Revenues increased 4.2% year over year to $883.9 million, while pre-tax operating earnings rose 4% to $106 million, but both figures missed estimates [6] - Life Insurance: Revenues decreased 2.2% year over year to $330.5 million, yet pre-tax operating earnings surged 36% to $13.3 million, although below the estimate of $27.3 million [7] - Corporate: Pre-tax operating losses widened to $105.6 million, exceeding the estimate of a loss of $71.5 million [8] Financial Update - As of March 31, 2025, cash and cash equivalents were $3.9 billion, down 7% year over year, while long-term debt increased 10% to $4.3 billion [9] - Book value per share was $53.70, a slight decrease of 0.1% year over year [9] Dividend and Share Repurchase - Principal Financial returned $369 million to shareholders, including $200 million in share repurchases and $169 million in dividends [10] - The board raised the second-quarter dividend by 7% to 76 cents, marking a 9% increase on a trailing 12-month basis [10]