Principal Financial Profit Hit by Unfavorable Insurance Claims

Principal Financial Group, one of the largest sellers of 401(k) retirement plans in the U.S., said earnings fell in the first quarter, hurt by unfavorable claims in its insurance business.

The provider of mutual finds and annuities said earnings were $257.1 million or 85 cents a share, down from $285.7 million, or $1.01 a share, in the year earlier quarter.

Principal Financial said operating earnings, which analysts use to measure performance because it excludes investments, were $236.8 million, or 87 cents a share. A consensus analysts' estimate from Thomson Financial put the company's earnings at 93 cents a share.

In the year ago quarter, the Des Moines, Iowa-based insurer earned $240.2 million, or 85 cents a share.

Principal said it expected 2007 earnings to be $3.80 to $3.92 a share.