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Principal Financial (PFG) Q3 Earnings: Is a Beat in Store?

Principal Financial Group, Inc. PFG is set to report third-quarter 2017 results on Oct 26, after the market closes. The company delivered a positive earnings surprise in the last two quarters. Let’s see what it has in store for this soon-to-be reported quarter.

Given a gradually improving interest rate environment, the investment income, indicating a major component to the top line, has likely improved.  

The company’s fee-based revenue sources coupled with improved investment income likely have driven increased revenues. The Zacks Consensus Estimate for revenues is pegged at $3.1 billion, reflecting a 10.8% year-over-year increase.

Assets under management are expected to have improved owing to better performance in asset management and asset accumulation segments.

The company’s bottom line likely has benefited from share buybacks.

Given its expanded suite of investment options, the company expects solid cash flows in core US retirement plan market in the quarter to be reported.

However, escalating expenses are expected to have weighed on desired margin expansion.

The Zacks Consensus Estimate for the third quarter is pegged at $1.29 per share, reflecting a 12.4% year-over-year rise.

What Our Quantitative Model Predicts

Our proven model shows that Principal Financial is likely to beat estimates this quarter. This is because a stock has the right combination of two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat.

Zacks ESP: Principal Financial has an Earnings ESP of +0.33% as the Most Accurate estimate of $1.30 is pegged higher than the Zacks Consensus Estimate of $1.29. You can uncover the best stocks to buy or sell before they are reported with our https://www.zacks.com/premium/esp-buy?adid=zp_article_espfil...">Earnings ESP Filter.

Principal Financial Group Inc Price and EPS Surprise


Zacks Rank: Principal Financial carries a Zacks Rank #2, which increases the predictive power of ESP. You can see https://www.zacks.com/stocks/buy-list/?ADID=zp_1link&ICI... _1link">the complete list of today’s Zacks #1 Rank stocks here.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some other stocks worth considering from the finance sector with the right combination of elements to come up with an earnings beat this quarter are as follows:

Prudential Financial PRU is set to report third-quarter earnings on Nov 1 with an Earnings ESP of +0.07% and carries a Zacks Rank of 2.

Lincoln National Corporation LNC has an Earnings ESP of +0.05%. This #2 Ranked company is slated to report third-quarter earnings on Nov 1.

American Equity Investment Life Holding Company AEL has an Earnings ESP of +0.40%. This Zacks #2 Ranked company is set to report third-quarter earnings on Nov 6.

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Lincoln National Corporation (LNC): Free Stock Analysis Report
 
American Equity Investment Life Holding Company (AEL): Free Stock Analysis Report
 
Principal Financial Group Inc (PFG): Free Stock Analysis Report
 
Prudential Financial, Inc. (PRU): Free Stock Analysis Report
 
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