NEW YORK (TheStreet) -- Shares of Principal Financial Group (PFG - Get Report) are higher 3.57% to $46.39 on Friday after the retirement savings and investment company, announced its first quarter 2014 results.
Principal Financial reported first quarter operating earnings increased 36% to $317.1 million, or $1.06 per diluted share, compared to $223.3 million, or 79 cents EPS from the same quarter in 2013.
Net income increased 65% to $293.7 million, or 95 cents per diluted share, versus the $178.3 million, or 61 cents per diluted share reported in the first quarter 2013.
The company also announced a 12% increase in revenue, of $2,499.3 million, compared to $2,238.3 million from quarter one 2013.
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TheStreet Ratings team rates PRINCIPAL FINANCIAL GRP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PRINCIPAL FINANCIAL GRP INC (PFG) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, solid stock price performance and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Although PFG's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
- PRINCIPAL FINANCIAL GRP INC has improved earnings per share by 6.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRINCIPAL FINANCIAL GRP INC increased its bottom line by earning $2.96 versus $2.60 in the prior year. This year, the market expects an improvement in earnings ($3.88 versus $2.96).
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.55% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has increased to $823.30 million or 16.41% when compared to the same quarter last year. Despite an increase in cash flow, PRINCIPAL FINANCIAL GRP INC's average is still marginally south of the industry average growth rate of 22.28%.
- You can view the full analysis from the report here: PFG Ratings Report
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