MONEY

Principal Financial posts record earnings in 2014

Matthew Patane

mpatane@dmreg.com

Principal Financial Group had a record year in 2014, the Des Moines-based company reported Thursday.

The insurance and investment management company said its annual operating earnings rose to more than $1.3 billion, or $4.41 per share. That is up 24.3 percent from $1.06 billion in 2013, or $3.55 per share.

Analysts had expected Principal to report earnings per share of $4.37 for the year.

Revenues rose just under 10 percent to about $10.6 billion, up from $9.6 billion for 2013.

Principal is a major Des Moines employer with about 6,000 employees in the metro.

All four of Principal’s main divisions, which include retirement services and insurance, reported higher earnings for the year.

CEO Larry Zimpleman said Principal’s diversification among insurance, retirement products and international operations helped the company overcome certain obstacles, such as low interest rates and a stronger U.S. dollar.

“We’ve got tremendous momentum and strength and diversification that is weathering the macroeconomic headwinds that would otherwise be impacting the business,” Zimpleman told the Register.

Principal’s net income for 2014 rose to more than $1.1 billion, or $3.65 per share, up from $879.7 million, or $2.95 a share, a year prior.

Operating earnings and net income are both measures of profit. Insurance companies prefer to use operating earnings because it removes the effects of one-time gains or losses.

For the fourth quarter, which ended Dec. 31, Principal reported operating earnings of $324 million, or $1.09 per share, up from $286 million, or 96 cents per share, for the same time a year ago.

Net income for the quarter rose to $270.4 million, or 91 cents per share, up from $233.4 million, or 78 cents per share, in the fourth quarter of last year.

The company had $519.3 billion in assets as of Dec. 31 up from $483.2 billion at the end of 2013.

Principal, which trades under the symbol PFG, released its earnings after markets closed Thursday.

Shares of PFG closed up 14 cents to $48.08 Thursday.