Equitable Holdings’ Q4 2024 Earnings: Resilient Growth Amid Investment Pressures

Equitable Holdings, Inc. (EQH) shares have increased by 3.4% since the company unveiled its fourth-quarter 2024 results on February 5, 2025. While the results were impacted by challenges in investment earnings, growth in key revenue segments, particularly Asset Management and Wealth Management, helped to mitigate some of the losses. Increased assets under management (AUM), improved fee income, and reduced benefits and deductions also contributed positively.

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EQH reported adjusted earnings per share (EPS) of $1.57 for the fourth quarter, missing the Zacks Consensus Estimate by 2.5%. However, this figure saw an 18% increase compared to the prior year.

Operating revenues rose to $4 billion, an 11.3% increase compared to the same quarter last year, although this fell short of consensus estimates by 1%.

Examining EQH’s Q4 Performance

Policy charges and fee income increased 6.5% year over year to reach $638 million. Additionally, premiums rose by 3.9% to total $292 million. Conversely, net investment income slightly declined to $1.2 billion, down 1.7% from the previous year.

Total benefits and other deductions decreased 18.9% year over year, landing at $2.4 billion. This decline was largely due to previous negative market risk benefits affecting last year’s expenses. Other operating costs also dropped by 8.2% year over year.

Analysis of Equitable Holdings, Inc.’s Price and Earnings Performance

Equitable Holdings, Inc. price-consensus-eps-surprise-chart | Equitable Holdings, Inc. Quote

Equitable Holdings recorded a pre-tax income of $1.2 billion, a significant turnaround from a loss of $817 million in the same quarter last year.

As of the end of the fourth quarter, total AUM stood at $918.8 billion, reflecting an 8.9% year-over-year increase. Total Assets Under Management/Administration (AUM/A) grew by 10% year over year, reaching $1 trillion.

Breaking Down EQH’s Q4 Segment Performance

Individual Retirement: This segment achieved revenues of $978 million, a rise of 24.9% year over year, exceeding the Zacks Consensus Estimate of $949.5 million. Pre-tax income also grew by 7.9% to $274 million.

Group Retirement: Revenues in this segment surged 22% year over year to $305 million, surpassing the consensus of $303.4 million. Pre-tax income climbed 29.1% year over year to $151 million.

Asset Management: This sector achieved revenues of $1.25 billion, a 16.3% increase year over year, beating the consensus estimate of $1.15 billion. Pre-tax income soared 44.4% year over year to $345 million.

Protection Solutions: The unit’s revenues grew by 3% year over year to $831 million, however, this fell short of the Zacks Consensus Estimate of $870.3 million. Pre-tax income was $35 million, reflecting a 6.1% increase.

Wealth Management: Revenues in this segment rose to $481 million, an increase of 17.9% year over year, outperforming the consensus estimate of $470.8 million. Nevertheless, pre-tax income dipped by 1.7% to $59 million.

Legacy: This segment reported revenues of $129 million, a growth of 2.4% year over year, exceeding the consensus estimate of $120.5 million. Pre-tax income increased by 15.8% to $44 million.

Equitable Holdings’ Financial Position as of December 31, 2024

At the conclusion of the fourth quarter, Equitable Holdings had total investments and cash equivalents of $123.4 billion, marking an 11.8% increase from end-2023. The company’s total assets reached $295.9 billion, rising 6.9% from the previous year-end.

Long-term debt stood at $3.8 billion, a slight increase from the figure as of December 31, 2023.

However, total equity decreased by 21.5% year over year to $3.4 billion.

Capital Returned by Equitable Holdings

During the fourth quarter, Equitable Holdings returned $335 million to shareholders, consisting of a $75 million cash dividend and $260 million in share repurchases. The company targets a payout ratio of 60-70% of non-GAAP operating earnings through 2027.

Looking Ahead: EQH’s Annual Performance

For the full year of 2024, EQH reported adjusted EPS of $5.93, reflecting a 29.2% increase from the prior year. Total revenues grew by 18.1% year over year to $12.4 billion.

Policy charges and fee income rose to $2.5 billion, a 4.8% increase year over year. Premiums also climbed 5.3% to $1.2 billion.

The company’s pre-tax income nearly tripled from the previous year, reaching $2.1 billion.

Future Outlook for Equitable Holdings

Equitable Holdings aims to generate cash between $1.6 billion and $1.7 billion in 2025, while maintaining a long-term goal of generating $2 billion annually from 2023 to 2027. The company also expects a compound annual growth rate (CAGR) of 12-15% for non-GAAP operating EPS during this period.

Zacks Rank for EQH

Currently, Equitable Holdings holds a Zacks Rank #3 (Hold). See the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Comparative Analysis of Financial Sector Peers

Several finance sector peers have also reported their fourth-quarter results. For example, Virtu Financial, Inc. (VIRT), Euronet Worldwide, Inc. (EEFT), and American Express Company (AXP) all exceeded their respective Zacks Consensus Estimates.

Virtu Financial reported fourth-quarter 2024 adjusted EPS of $1.14, which exceeded the Zacks Consensus Estimate by 32.6%. This figure represented an increase of more than four times year over year. Adjusted net trading income surged by over 75% year over year to $457.7 million, beating the consensus estimate by 14.7%. Revenue from commissions, as well as net and technology services, reached $140.5 million, up 22.8% year over year. Interest and dividend income, however, decreased to $123.8 million from $154.7 million in the previous year.

In addition, adjusted EBITDA jumped to $283.5 million from $99 million a year ago, reflecting a significant improvement in the adjusted EBITDA margin of 57.5%, up 2,400 basis points year over year. In the Market Making segment, adjusted net trading income reached $347.9 million in the fourth quarter, up 107.7% year over year. The segment’s revenues increased by 67.5% year over year, totaling $706.5 million. The Execution Services unit also reported a healthy performance with adjusted net trading income of $109.8 million, which grew 17.6% year over year.