Principal Financial Beats Profit Forecasts, Boosts Dividend on Core Strength

DES MOINES, IA – April 23, 2026 – Principal Financial Group (Nasdaq: PFG) delivered a robust first-quarter financial performance that surpassed Wall Street's profit expectations, underpinned by strong execution across its diversified business segments. The company announced a dividend increase and significant capital returns to shareholders, signaling strong confidence despite reporting revenues that fell short of analyst forecasts.

For the quarter ending March 31, 2026, Principal reported non-GAAP operating earnings of $2.07 per diluted share, a 14% increase from the prior year and comfortably ahead of the consensus analyst estimate which hovered around $2.01 per share. However, total revenue of $3.53 billion for the quarter missed projections by a notable margin, as analysts had anticipated figures closer to $4.1 billion. This divergence between a strong bottom line and a lighter top line paints a picture of a company successfully navigating a complex economic environment through disciplined cost management and solid underlying operational momentum.

Peeling Back the Layers of Profitability

A closer look at the results reveals a core business performing even better than the headline numbers suggest. Principal highlighted a key metric, "non-GAAP operating earnings excluding significant variances," which came in at $2.17 per share, a 13% year-over-year increase. These variances, which had a net negative impact on reported earnings, are often tied to market fluctuations, such as variable investment income and the effects of inflation in Latin American markets. By stripping out this volatility, the company presents a clearer view of its sustainable, run-rate earnings power, which grew at a double-digit pace.

This focus on core performance was echoed by Chair, President, and CEO Deanna Strable. "Driven by fundamentals and a sharp focus on higher growth markets, we delivered strong revenue growth, EPS growth and ROE expansion in the quarter," Strable stated in the company's announcement. "Disciplined risk management and focused growth investments further enable the delivery of long‑term value for shareholders and customers.”

The company's GAAP net income attributable to PFG showed a dramatic year-over-year increase, soaring 783% to $424.6 million, or $1.93 per share, compared to $48.1 million, or $0.21 per share, in the first quarter of 2025. This substantial jump reflects a more normalized environment compared to the prior-year period, which was impacted by various market and accounting adjustments.

Diversified Engine Powers Segment Growth

The strength in Principal's first-quarter results was broad-based, with all major business segments contributing positively and demonstrating the resilience of its diversified model.

The Specialty Benefits division was a standout performer, with pre-tax operating earnings surging 29% to $136.8 million. This was fueled by record sales of $213 million, a 24% increase from the prior-year quarter, and a more favorable underwriting experience. The segment's incurred loss ratio improved to 58.5%, below its targeted range, driven by strong results in group life and dental as well as continued strength in group disability.

The International Pension segment also delivered impressive results, with pre-tax operating earnings climbing 17% to $83.4 million. The division achieved a record $159.6 billion in assets under management (AUM), a 20% increase year-over-year, bolstered by business growth, performance fees, and favorable foreign currency tailwinds. This performance slightly exceeded analyst expectations for the segment's AUM.

Principal's largest segment, Retirement and Income Solutions (RIS), posted a solid 6% increase in pre-tax operating earnings to $302.1 million. The company attributed the growth to higher net revenue, which rose 4% due to favorable market performance and continued business growth, alongside disciplined expense management. The segment saw robust transfer deposits of $12 billion, up 35% from the prior year.

In Investment Management, pre-tax operating earnings grew 8% to $125.1 million on the back of higher management fees from increased AUM. Gross sales were strong at $37 billion, a 21% increase. However, the segment's total AUM of $578 billion, while up 4% year-over-year, came in slightly below some analyst forecasts, indicating a potential area for scrutiny in a competitive asset management landscape.

Finally, the Life Insurance business saw a remarkable 150% jump in pre-tax operating earnings to $33.2 million, primarily driven by improved mortality experience.

Rewarding Shareholders with Confidence

Reinforcing its positive outlook, Principal announced a significant return of capital to its investors. The company returned a total of $374 million to shareholders in the first quarter, consisting of $200 million in share repurchases and $174 million in common stock dividends. This is part of a broader strategy to deploy between $1.5 billion and $1.8 billion in capital during 2026.

Further underscoring its financial health and commitment to shareholder returns, the board of directors announced a $0.02 increase in the quarterly common stock dividend to $0.82 per share for the second quarter. This marks an 8% increase over the dividend paid in the second quarter of 2025 and aligns with the company's target of maintaining a 40% dividend payout ratio. Such consistent dividend growth is a powerful signal of management's confidence in the company's long-term cash generation capabilities and balance sheet stability.

The company ended the quarter in a robust financial position, with $1.45 billion of excess and available capital and total assets under management reaching $770 billion. This financial flexibility allows Principal to navigate market uncertainty while continuing to invest in strategic growth initiatives, such as the recent acquisition of a dental benefits network in Alabama to enhance its competitiveness in the healthcare insurance sector. As the company moves into the second quarter, its ability to manage expenses and leverage its diversified portfolio will remain critical to sustaining its earnings momentum in a dynamic global economy.