It has been about a month since the last earnings report for Voya Financial (VOYA). Shares have added about 10.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Voya due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Voya Financial Q3 Earnings Surpass Estimates on Higher Premiums

Voya Financial, Inc. reported third-quarter 2024 adjusted operating earnings of $2.12 per share, which beat the Zacks Consensus Estimate by about 4.8%. The bottom line increased 2.4% year over year.

Behind the Headlines

Adjusted operating revenues amounted to $1.97 billion, which increased 7.6% year over year. The increase was driven by higher fee income, premiums and other revenues. Net investment income decreased 7.5% year over year to $506 million. Meanwhile, fee income of $489 million increased 10.4% year over year. Premiums totaled $796 million, up 16.7% from the year-ago quarter.
Total benefits and expenses were $1.8 billion, up 11.4% from the year-ago quarter. As of Sept. 30, 2024, VOYA’s assets under management, assets under administration and advisement totaled $391.6 million.

Segmental Update

Wealth Solutions recorded adjusted operating earnings of $211 million, which rose 17.8% year over year. The increase was primarily due to growth in fee-based revenues. Full-service recurring deposits grew 10.5% to $3.9 billion, driven by growth in Corporate and Tax-Exempt markets.

Health Solutions adjusted operating earnings amounted to $23 million, which declined 56.6% year over year. Annualized in-force premiums and fees grew 16% to $3.9 billion. The increase reflects growth across all product lines due to strong sales and favorable retention. 

Investment Management posted adjusted operating earnings, excluding Allianz's noncontrolling interest, of $55 million, which increased 12.2% year over year. The increase was primarily due to higher fee-based revenues benefiting from positive capital markets and strong business momentum. Net inflows were $3.8 billion during the three months ended Sept. 30, 2024, generating organic growth of 1.3%. This reflects further growth from Insurance channel clients and continued positive flows within Retail.

Corporate incurred pre-tax adjusted operating losses, excluding Allianz's noncontrolling interest, were $59 million, wider than $52 million loss incurred in the year-ago quarter. The losses reflect the impact of the preferred stock dividend reset in the prior year.

Financial Update

Voya Financial exited the quarter with cash and cash equivalents of $1.4 billion, which surged 75.7% year over year. Total investments amounted to $36 billion, down 0.4% year over year.Long-term debt at quarter-end was $2.1 billion, up 0.2% from 2023-end. The financial leverage ratio, excluding AOCI, deteriorated 280 basis points year over year to 30.6%. As of June 30, 2023, book value per share (excluding AOCI) was $60.96, which increased 5.9% year over year. As of Sept. 30, 2024, Voya Financial had approximately $0.4 billion of excess capital.

Capital Deployment

Voya Financial returned $0.2 billion of excess capital in third-quarter 2024 through $149 million of share repurchases and $44 million of common stock dividends.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, Voya has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Voya has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Voya is part of the Zacks Insurance - Life Insurance industry. Over the past month, Lincoln National (LNC), a stock from the same industry, has gained 6.5%. The company reported its results for the quarter ended September 2024 more than a month ago.

Lincoln National reported revenues of $4.6 billion in the last reported quarter, representing a year-over-year change of -1.5%. EPS of $2.06 for the same period compares with $0.23 a year ago.

Lincoln National is expected to post earnings of $1.83 per share for the current quarter, representing a year-over-year change of +26.2%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Lincoln National. Also, the stock has a VGM Score of C.

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