Principal Financial Group Inc (NYSE: PFG) in the fourth quarter 2016 ended 31st December has reported the adjusted earnings per share of $1.27. Even though the outcome was better than the analysts’ estimates of $1.15 adjusted earnings per share, investors have been booking profits in the stock which fell over 1.3% (as of 10:11AM EST on January 31st, 2017; Source: Google finance). Moreover, the group’s total expenses grew 24 percent year over year to $3.1 billion, due to the increase in benefits, claims and settlement expenses, commission expenses, and compensation and other. PFG stock generated over 50% returns in the last one year.
During the fourth quarter, Principal Financial Group has expanded its solution set as well as strengthened relationships with the customers and distributors. Moreover, the operating revenues in the Q4 quarter have increased 24.3 percent year over year to $3.6 billion.
Principal Financial Group’s pre-tax operating earnings at the U.S. insurance operations has increased to $107 million, from $87 million. The individual life unit generated $35 million in operating earnings on $249 million in premiums and fees, increasing from $30 million in operating earnings on $239 million in premium fees. Further, the specialty benefits unit, which sells products such as disability insurance, dental insurance, and vision insurance, produced $72 million in operating earnings on $479 million in premiums and fees, grew from $57 million in operating earnings on $439 million in premiums and fees. Overall, the premiums and fees grew 4 percent for the life business and 9 percent for the specialty benefits business. The growth of the specialty benefits business was due to the strong persistency and record sales, as well as, the division continues to benefit from favorable loss ratios.
Principal Financial Group’s Asset under Management (AUM) as of December 31st, 2016 grew 12.2 percent to $591.6 billion from December 31st, 2015. As of December 31st, 2016, the book value per share was $37.90, which is up 8.3% year over year.
Principal Financial Group declared the first quarter 2017 common stock dividend of $0.45 per share, which is an 11 percent increase on a trailing twelve-month basis over first quarter 2016. PFG has paid a quarterly dividend of $465 million of common stock dividends and has bought back 6.2 million shares worth $257 million during 2016. Furthermore, PFG has lowered debt by $94 million and invested $40 million for increased ownership in investment boutiques.