February 8, 2011

2010 Q4 Earnings: Principal Boosts Results but Misses Estimates

For the full year, Principal Financial said its mutual funds had net inflows of $1.6 billion

Principal Financial Group said late Monday that its fourth-quarter net income was $199.3 million, or $0.62 per share, vs. $141.9 million, or $0.44 per share in the year-ago period.

Operating revenues for the fourth quarter were $2.11 billion compared to $1.98 billion for the same period last year.

Equity analysts had anticipated that Principal would earn $0.68 per share on sales of $2.04 billion.

The company’s shares traded down 4.4% late Monday to $32.20.

For the full-year 2010, the company had net income of $666.3 million, or $2.06 per share, compared to $589.7 million, or $1.97 per share in 2009. Operating revenues for the year 2010 were $8.04 billion compared to $7.71 billion for the same period last year.

"The Principal finished the year strong with all-time record assets under management and an increase in operating earnings,” said Larry D. Zimpleman, chairman, president and CEO in a press release.

“Strong sales in full service accumulation and Principal funds paired with record net cash flow in Principal International demonstrate the growth we're seeing across our businesses," he added.

Principal International reported assets under management of $45.8 billion as of Dec. 31, 2010, and net cash flow of $4.7 billion for the year.

The company also said it had net cash flows into Principal Funds of $1.6 billion for 2010.

In the quarter, Principal had sales of $3.2 billion for Full Service Accumulation, $2.6 billion for Principal Funds and $306 million for Individual Annuities.

This combined segment had assets under management of $175.0 billion as of Dec. 31, 2010, compared to $159.8 billion as of Dec. 31, 2009, despite a $3.3 billion decrease in investment-only account values.

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