Principal Financial Group Earnings: Consecutive Profit Quarter Streak Stays Intact

S&P 500 (NYSE:SPY) component Principal Financial Group Inc. (NYSE:PFG) reported its results for the second quarter. Principal Financial Group promotes investment, saving, and insurance products and services in the U.S. and some international markets.

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Principal Financial Group Inc. Earnings Cheat Sheet

Results: Net income for Principal Financial Group Inc. fell to $173.1 million (58 cents per share) vs. $217.3 million (67 cents per share) a year earlier. This is a decline of 20.3% from the year-earlier quarter.

Revenue: Rose 1.8% to $2.14 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Principal Financial Group Inc. reported adjusted net income of 72 cents per share. By that measure, the company fell short of mean estimate of 74 cents per share. It fell short of the average revenue estimate of $2.18 billion.

Quoting Management: “The second quarter saw a continuation of the strong business fundamentals of the past few quarters. We expect this momentum to continue despite ongoing macro headwinds,” said Larry D. Zimpleman, chairman, president and chief executive officer of Principal Financial Group, Inc. “The diversification of our investment management plus strategy allows us to generate deployable capital, even in challenging times.” Added Terry Lillis, senior vice president and chief financial officer, “Our shift to a more fee-based business model allows us to operate from a position of financial strength. We deployed $475 million of excess capital in the first half of 2012 through a strategic international acquisition, quarterly dividends and opportunistic share repurchases. We remain on track to deploy our targeted $800 to $900 million of excess capital, which we can return to shareholders or invest in strategic M&A as opportunities arise.”

Key Stats:

The company has now missed analyst estimates for the last four quarters. It fell short by 4 cents in the first quarter, by 4 cents in the fourth quarter of the last fiscal year, and by 10 cents in the third quarter of the last fiscal year.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 78 cents per share, down from 81 cents ninety days ago. For the fiscal year, the average estimate has moved down from $3.18 a share to $3.03 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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