Principal Financial Group, Inc. PFG is set to report fourth-quarter 2017 results on Jan 29 after the market closes. The company delivered a negative earnings surprise last quarter.
Let’s see, what it has in store for this soon-to-be reported quarter.
The company’s fee-based revenue sources and improved investment income likely have driven its top line.
Better performance in asset management and asset accumulation segments owing to core growth as well as strategic acquisition are anticipated to have fueled improvement of assets under management.
The company’s bottom line is expected to have benefited from share buybacks. Principal Financial estimates capital deployment ranging between $800 million and $1.1 billion in 2017.
Encouraging results at Principal Global Investors coupled with lower claims in sales related expenses in Specialty Benefits along with macro factors have possibly aided operating earnings in the quarter to be reported.
However, escalating expenses are predicted to have weighed on the desired margin expansion.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.37 on revenues of $3.32 billion. While the bottom line reflects a 7.9% increase, the top line translates to a decline of 7.5%, both on a year-over-year basis.
For 2017, Principal Financial estimates net revenue growth in the range of 2-5% at Retirement and Income Solutions — Fees and 5-10% rise at Retirement and Income Solutions — Spread. Revenues are estimated to increase in the range of 4-8% at Principal Global Investors. Principal International is expected to deliver net revenue growth between 11% and 14% in 2017. Premium and fees at Individual Life are projected to increase in the 3-6% range while the same at Specialty Benefits is forecast to increase 7-9%.
Principal Financial Group Inc Price and EPS Surprise
What Our Quantitative Model Predicts
Our proven model does not conclusively show that Principal Financial is likely to beat estimates this quarter. This is because a stock must have the right combination of the two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. But that is not the case here as u can see below.
Zacks ESP: Principal Financial has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.37. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Principal Financial carries a Zacks Rank #3, which increases the predictive power of ESP. However, an earnings ESP of 0.00% makes surprise prediction difficult.
You can see the complete list of today’s Zacks #1 Rank stocks here.
We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some investment managers worth considering from the finance sector with the right combination of elements to come up with an earnings beat this time around are as follows:
Franklin Resources, Inc. BEN has an Earnings ESP of +0.98% and a Zacks Rank #2.The company is slated to report fourth-quarter earnings on Jan 30.
T. Rowe Price Group, Inc. TROW is set to release fourth-quarter financial numbers on Jan 30. The company has an Earnings ESP of +0.90% and a Zacks Rank of 2.
Apollo Global Management, LLC APO is set to announce fourth-quarter results on Feb 1. The company has an Earnings ESP of +4.30% and is a Zacks #2 Ranked player.
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