ING U.S. Inc. VOYA -3.21% narrowed its first-quarter loss as the insurance and retirement-savings-plan provider reported a stronger performance from its retirement and annuities segments.
The quarter marks ING U.S.'s first as a public company. ING U.S.'s initial public offering deal recently priced below expectations, prompting the company to sell more stock than it had planned in order to meet its fundraising goal. However shares have since gained 25% since the company's debut through Wednesday's close.
Thursday, Chief Executive Rodney O. Martin, Jr., said the firm's retirement segment and investment management segment achieved $1.4 billion and $3.2 billion in net flows, respectively. He added that ING U.S. is making steady improvement in its return on equity, and that the company is on track to hit its ROE targets for the year.
Total assets under management were $258 billion, while total assets under management and administration were $481 billion
For the quarter, ING U.S. reported a loss of $212 million, or 92 cents a share, versus a year-ago loss of $505.2 million, or $2.20 a share. Stripping out one-time items, operating earnings were 73 cents a share from 68 cents. ING U.S. reported a net loss of $310 million in its Closed Block Variable Annuity segment, including an after-tax loss of $69 million due to a decline in nonperformance risk.
In a statement, the company said "the significant equity market appreciation" during the first quarter, "which is economically a positive development over the long term, resulted in accounting asymmetry for the Closed Block Variable Annuity segment, which more than offset the positive contributions of our operating earnings for the Ongoing Business."
The firm's ROE was negative 6.2% for the quarter.
Operating earnings from the retirement segment rose 11% to $137.8 million, while those from annuities rose 49% to $54.3 million. Meanwhile, investment management operating earnings fell 8.8% to $30.1 million, individual life's fell 7.6% to $50.8 million, and employee benefits dropped 21% to $12.4 million.
ING U.S. plans to change its name to Voya Financial in the next few years as it separates from Dutch parent ING Groep NV (ING, INGA.AE), which was directed to divest itself of overseas assets after a 2008 government bailout.
The company has seen its bottom line improve in recent years, but a portfolio of investment products with lifetime-income guarantees sold before the financial crisis clouds its earnings prospects, some investors say. In addition, ING Groep, which reduced its stake in ING U.S. to 75% by selling stock in the IPO, is due to shed the rest of its holdings by the end of 2016.
Shares closed Wednesday at $25.97 and were inactive in recent premarket trading.