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Principal Reports 1st Quarter Net Loss

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NU Online News Service, May 8, 11:54 a.m. – Principal Financial Group Inc., Des Moines, Iowa, is reporting a $35 million net loss for the first quarter on $2.2 billion in revenue, compared with $105 million in net income on $2.3 billion in revenue for the first quarter of 2001.

The company’s operating income, which excludes investment gains and a $281 million, non-cash charge for reducing the stated value of past acquisitions, increased to $187 million, from $174 million.

? Asset management: Operating income increased 12%, to $100 million, while revenue fell 15%, to $862 million. Income was up because of growth in assets, but revenue fell because of lower sales of single-premium group annuities, Principal says.

? Life and health insurance: Operating income rose 28%, to $54 million, while revenue fell 2%, to $979 million. Group medical and dental claims ratios improved, but revenue was down because of premiums ceded to a reinsurer through a new reinsurance agreement, Principal says.