Principal Gains as Insurer Tops Estimates, Lifts Dividend

Principal Financial Group Inc. posted the biggest gain in the 83-company Standard and Poor’s 500 Financials Index after reporting first-quarter profit that exceeded analysts’ estimates and lifting its dividend.

Principal rallied 3.3 percent to $46.28 at 10:10 a.m. in New York. The Des Moines, Iowa-based insurer is down about 6.1 percent this year.

Principal, which sells insurance, offers retirement accounts and oversees funds for investors, yesterday reported operating profit of $1.06 a share, beating the 92 cent average estimate of analysts in a Bloomberg survey. The company also boosted its quarterly dividend by 14 percent to 32 cents a share and authorized a $200 million buyback, according to a statement late yesterday.

“Principal continued to enjoy solidly positive flows into its 401K coffers,’” Eric Berg, an analyst at RBC Capital Markets, said in a research note today. “Principal is deepening its involvement with the third-party money-management business and with the pension business outside the U.S.”

Operating profit jumped 27 percent to $216.5 million at the retirement and investor services segment. At the Principal International business, results benefited from a deal for a Chilean pension manager, sending operating profit up 42 percent to $63.3 million.

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