DOW JONES NEWSWIRES
Principal Financial Group Inc.'s (PFG) second-quarter profit
dropped 10% on lower revenue and a drop in fee income.
Shares were down 2% to $24.94 in after-hours trading as revenue
missed analysts' expectations. The shares are down by about 50%
from their 52-week high of $54.28 in September.
Chief Financial Officer Terry Lillis said institutional
investors continued to delay funding due to market volatility,
while rising unemployment lowered the number of participants in
existing employment benefit plans and investment income has
declined. Still, Lillis expects those pressures to ease over the
next several quarters.
In June, Principal became the fourth of six approved life
insurance companies to reject an investment from the U.S.
government, saying capital markets have improved since its initial
application last year. The company improved its capital base
through a $1.15 billion secondary equity offering and $750 million
debt offering. Unlike many of its peers, Principal Financial has
avoided slipping into the red.
The provider or retirement services, insurance and investment
products reported earnings of $158.6 million, or 52 cents a share,
down from $176.6 million, or 64 cents a share, a year earlier.
Excluding investment losses, earnings fell to 69 cents from 97
cents.
Revenue decreased 19% to $2.16 billion.
Analysts polled by Thomson Reuters expected per-share earnings
of 63 cents on revenue of $2.47 billion.
Total assets under management declined 16% to $257.7 billion as
of June 30, but grew 9% from the first quarter amid the stock
market's rally. U.S. asset-accumulation earnings declined 10%,
while global asset management's profit decreased 19%.
The life and health insurance segment reported a 13% drop in
profit.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com