Principal Rallies After Profit Beats Estimates: Chicago Mover

Principal Financial Group Inc., the seller of life insurance and retirement products, rallied the most in 19 months after reporting profit that beat analysts’ estimates and raising its dividend.

Principal advanced 5.7 percent to $42.75 at 10:19 a.m. in New York, the third-best performer in the Standard & Poor’s 500 Index and the most since December 2011. Shares of the Des Moines, Iowa-based insurer have gained 49 percent this year.

Net income rose 33 percent to $222.3 million in the three months ended June 30 on better results from retirement products and money management, Principal said yesterday in a statement. Operating profit of 91 cents a share exceeded by nine cents the average estimate of 19 analysts surveyed by Bloomberg.

“The headline earnings beat was broad-based, as every operating segment was stronger than expected,” Ed Shields, an analyst at Sandler O’Neill & Partners LP, wrote in a research note.

Principal boosted the quarterly dividend on its common stock 13 percent to 26 cents a share.

“We continue to grow net income and the percentage of earnings from fee-based businesses, providing financial flexibility to deploy capital in the best interest of our shareholders,” Chief Financial Officer Terry Lillis said in the statement.

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