Principal Financial posts net income of $631.9 million in third quarter
Key Facts
Principal Financial Group said on October 26 that net income attributable to the company was $631.9 million in the third quarter of 2026, compared with $213.8 million in the same period of 2025. Non-GAAP operating earnings were about $481.8 million, or $2.22 per diluted share. That represented year-over-year increases of 2% in operating earnings and 6% in earnings per share, compared with $473.7 million and $2.10 per share a year earlier. Excluding notable items, operating earnings rose to $540.6 million, or $2.49 per share, from $523.3 million and $2.32 per share. Chief Executive Diana Strandberg said the results “reflect the strength of the group’s diversified businesses and progress on its strategic priorities.”
Results varied across the company’s businesses. Pretax operating earnings in Retirement and Income Solutions fell 4% to $297.8 million from $310.3 million a year earlier. The company attributed the decline mainly to lower variable investment income and the effects of an actuarial assumption review in the third quarter of 2025. Meanwhile, recurring deposits in retirement and income solutions totaled $13 billion, up 8% year over year, while small-business plan conversion deposits increased 21%. The company said sales of small-business plan conversions continued to show momentum, though those indicators did not change the segment’s earnings trend during the quarter. In Asset Management, net revenue after intersegment expenses fell 2% to $436.1 million from $444 million, a decline of $7.9 million, with the company attributing the decrease mainly to lower management fees.
Asset Management showed growth in some areas, with private markets assets under management rising 6% and net private institutional flows reaching $0.8 billion during the quarter. Net flows into active exchange-traded funds were $0.5 billion. The group had $785 billion in assets under management, while assets under management and advisement totaled $1,840.3 billion, up 3% from $1,792.5 billion in the third quarter of 2025. In International Pension, assets under management rose 10% to $166 billion. But net revenue in the business fell 23% to $144.1 million from $187.9 million, a decline of $43.8 million. The company attributed the drop mainly to unfavorable returns on mandatory reserves in Chile, known as “encaje.”
In Specialty Benefits, premiums and fees rose 6% to $895.4 million from $845.2 million a year earlier, but pretax operating earnings fell 12% to $137.3 million from $155.5 million. The company said business growth was the main driver of the increase in premiums and fees, with a modest contribution from its acquisition of Beam Benefits on September 1. The incurred loss ratio was 59%, below the company’s target range of 60% to 64%. For the first nine months of 2026, net income attributable to the company was $1,976.9 million, compared with $1,573.5 million in the same period of 2025, an increase of 26%. The figures show how total net income followed a different trajectory from some operating segments during the quarter.
Principal Financial Group returned $429 million to shareholders in the third quarter, including $250 million through share repurchases and $179 million in common stock dividends. It also raised its fourth-quarter cash dividend to $0.85 per share, up one cent from the third quarter and 8% from the same period a year earlier. The dividend is scheduled to be paid on December 18 to shareholders of record on December 2, 2026. The move follows the dividends and repurchases recorded during the quarter and sets a clear date for the company’s next return of capital to shareholders. The company’s stock closed at $108.57 on October 23, before the results were announced.
Wall Street estimates before the results were released called for earnings of $2.46 per share and revenue of $4.31 billion in the third quarter. In the second quarter, the company reported earnings of $2.42 per share and revenue of $4.21 billion. Analysts’ earnings-per-share estimates fell 2.84% in the 60 days before the announcement, then declined 0.61% in the week before it. Revenue estimates fell 0.65% week over week, although they remained 1.57% above their level two months earlier. A Wells Fargo analyst had cut the earnings-per-share estimate to $2.30, citing an approximately 10-cent-per-share negative impact from Chilean mandatory reserves and saying the September sale of the Chilean pension business would reduce assets under management by about $2.2 billion. The analyst also said alternative investment performance and variable investment income fell short of long-term expectations during the quarter.
The company held a call on October 27, 2026, at 10 a.m. Eastern time to discuss the results, led by Chief Executive Diana Strandberg and Chief Financial Officer Joel Beitz. The call gives management an opportunity to present the quarter’s results and discuss the performance of its various businesses after the figures are released. The reported results include higher net income than a year earlier, as well as growth in operating earnings per share under the two measures presented by the company. At the same time, segment details showed declines in earnings for Retirement and Income Solutions, revenue for International Pension, and earnings for Specialty Benefits. Premium and fee growth and flows in some retirement and private markets businesses were also among the activity indicators reported by the company.