Principal Financial Group said on Monday that earnings tumbled nearly 45 percent in the second quarter, hurt by capital losses tied to impaired fixed-income investments.
Principal, one of the largest sellers of 401(k) retirement plans in the United States, said net income available to common shareholders fell to $168.3 million, or 64 cents a share, from $303.8 million, or $1.12 a share, in the year-earlier quarter.
Operating earnings, excluding investments and other items, dropped to $253.7 million from $282.9 million.
On that basis, Principal earned 97 cents a share, beating analysts' average expectations of 94 cents, according to Reuters Estimates.
Principal , a provider of mutual funds and annuities, recorded capital losses of $85.4 million in the quarter, compared with capital gains of about $21 million in the same period a year ago.
Included in the losses were $23 million from impairments to fixed-income securities, including some Alt-A and subprime-related mortgages. It also recorded losses on equity investments, and interest rate swaps.
Total revenue fell more than 6 percent to $2.65 billion, while total assets under management rose 9 percent to $308 billion at the end of June.
The stock rose 2.2 percent, or 92 cents, to close at $42.90 on the New York Stock Exchange on Monday, and edged up to $43.50 in aftermarket trading.
Principal Financial's shares have fallen about 37 percent since January, underperforming the Dow Jones Life Insurance Index , which has lost about 18.5 percent over the same period.