Financial services provider Principal Financial Group recorded sharply higher third-quarter net income on the sale of its share in a pharmacy benefit manager.
Des Moines-based Principal, with operations in Cedar Rapids, posted net income of $179.7 million, or 60 cents per share, in the quarter that ended on Sept. 30, compared with $71.9 million, or 23 cents per share, in the same period last year. Revenue was $2.7 billion in the most recent quarter, up from $2.09 billion in the third quarter of 2011.
The company attributed the higher net income to a $141.2 million net gain from the sale of its interest in Catalyst Health Solutions Inc. Principal divested its interest in Catalyst after it was acquired by SXC Health Solutions Corp., which changed its name to Catamaran Corp.
Principal Chairman and CEO Larry Zimpleman said the company had strong retirement and investor services sales in the quarter and record assets under management of $392.2 billion, in increase of 22 percent from the third quarter of 2011.
“We feel well positioned going into 2013,” Zimpleman said. “However, we continue to see macroeconomic headwinds, including foreign exchange and low interest rates that will pressure financial performance in the near term.”
Principal recorded a drop in operating income to $134.8 million in the third quarter from $193.2 million in the same period last year. Third-quarter operating earnings were reduced by $90.7 million, or 30 cents per share, resulting from the company’s previously announced quarterly actuarial assumption review.
Terry Lillis, Principal senior vice president and chief financial officer, said the impact of the review was a non-cash charge.