Principal Financial Profit Slips on Charges

Principal Financial Group, one of the largest U.S. providers of retirement and life and health insurance, said on Monday that operating earnings rose nearly 23 percent in the third quarter, exceeding analysts' estimates, as assets under management surged.

The company's shares lost 17 cents at $65.29 in after-hours trade; the stock had gained 17 cents, at $65.46 on the New York Stock Exchange during regular market hours.

But the insurer said profit dropped 5 cents from a year ago, due to unrealized capital losses related to hedging activities and marking its derivatives to market, as well as tax adjustment charges from prior years.

Des Moines-based Principal was unchanged in aftermarket trading after closing at $65.46, up 17 cents on the New York Stock Exchange. In the last 12 months, Principal rose about 16 percent compared to a slight gain in the Standard & Poor's insurance index.

Principal said operating earnings, which analysts use to measure performance, were $312.9 million or $1.17 per share. Analysts on average had expected the provider of financial products and investment services to earn $1 per share on that basis, according to Reuters Estimates.

In the year ago quarter, Principal earned $254.7 million or 94 cents per share in operating net.

Final net for the insurer included $59.4 million of capital losses -- largely unrealized -- from hedging and mark-to-market adjustments, as well as $21.2 million of after-tax adjustments.

The adjustments brought final net down to $232.3 million or 87 cents per share, from $251 million or 92 cents per share.

Principal Financial has been focused on managing assets from retiring baby boomers. In the latest quarter, assets under management rose 42 percent, or $91 billion, from a year ago to a record $306 billion.