Principal Financial Group, Inc. (NASDAQ:PFG) Q3 2023 Earnings Call Transcript


Principal Financial Group, Inc. (NASDAQ:PFG) Q3 2023 Earnings Call Transcript October 27, 2023

Operator: Good morning and welcome to the Principal Financial Group Third Quarter 2023 Financial Results Conference Call. There will be a question-and-answer period after the speakers have completed their prepared remarks. [Operator Instructions] A confirmation tone will indicate your line is in the question queue. We would ask that you’d be respectful of others and limit your questions to one and a follow-up so we can get to everyone in the queue. I would now like to turn the conference call over to Humphrey Lee, Vice President of Investor Relations.

Humphrey Lee: Thank you and good morning. Welcome to Principal Financial Group’s third quarter 2023 conference call. As always, materials related to today’s call are available on our website at Following a reading of a Safe Harbor provision, CEO, Dan Houston and CFO, Deanna Strable will deliver some prepared remarks. We will then open up the call for questions. Other members of Senior Management will also be available for Q&A. Some of the comments made during this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. The company does not revise or update them to reflect new information, subsequent events or changes in strategy. Risks and uncertainties that could cause actual results to differ materially from those expressed or implied are discussed in the company’s most recent annual report on Form 10-K filed by the company with the US Securities and Exchange Commission.

A closeup of an insurance document with a pen signing its content.

Additionally, some of the comments made during this conference call may refer to non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the most directly comparable US GAAP financial measures may be found in our earnings release, financial supplement and slide presentation. We’ll be hosting a combined fourth quarter 2023 earnings and 2024 outlook call on February 13th. We will share more details early on next year. Dan?

Dan Houston: Thanks, Humphrey and welcome to everyone on the call. This morning I’d like to share key aspects of our third quarter financial results and some notable performance highlights. Deanna will follow with additional details and an update on our current financial and capital position. Our diversified and increasingly integrated business model, as well as our leading and differentiated position in the US small to mid-sized business market contributed to a strong quarter. Across the enterprise we continue to balance investing for growth in our businesses with disciplined expense management. Starting on Slide 3, healthy sales growth across our businesses, and strong underwriting results drove reported non-GAAP operating earnings of $420 million or $1.72 per diluted share in the third quarter.

Excluding significant variances, earnings per share increased 14% over the third quarter of 2022. The synergies between our businesses increasingly integrated offering and the value of our distribution and joint venture partnerships continue to unlock value for our customers and shareholders. During the quarter, we delivered on our capital deployment strategy, investing for growth in our businesses and returning more than $350 million of capital to shareholders to share repurchases and common stock dividends. Our strong capital position enabled us to complete $200 million of share repurchases in the third quarter and to increase our dividend. After a strong start to the year, equity markets retreated in August and September. Foreign currency tailwinds in the first half of the year reversed in the third quarter, as the US dollar strengthened on growth and higher yields in the US, outpacing much of the rest of the world.

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