Equitable Holdings cites momentum, resilience in face of economic headwinds

Equitable Holdings, Inc. spotlighted resilience in the face of strong economic headwinds and steady growth in releasing its 2023 fourth quarter and full-year financial results.

Mark Pearson, President and Chief Executive Officer of Equitable Holdings, expressed satisfaction with the company's performance in 2023. "This was a momentous year for Equitable Holdings,” said Mark Pearson, president and CEO of Equitable. “We celebrated our fifth anniversary as a public company and successfully hosted our inaugural investor day in May, outlining our growth strategy and financial goals for the next five years,"

Despite the uncertain macroeconomic environment, Equitable Holdings delivered solid financial results, with businesses contributing $1.3 billion in predictable cash flow to the company, in line with full-year guidance. The company's strategic financial management, coupled with $2.0 billion of cash allowed for consistent capital return, Pearson said, aligning with its 60-70% payout ratio target. These financial results were acknowledged by S&P Global's upgrade of Equitable Holdings to an A- rating.

Interest rates, demographic trends helpful

Higher interest rates and favorable demographic trends also worked in Equitable's favor. The result has been a substantial $8.3 billion in Retirement and Wealth Management advisory net inflows over the past year.

At the end of 2023, total assets under management/assets under administration reached $930 billion, reflecting a 13% year-over-year increase driven by higher market valuations over the previous 12 months.

However, on a full-year basis, net income attributable to Holdings was $1.3 billion in 2023, a decrease compared to $2.2 billion in 2022. Non-GAAP operating earnings for the full year remained steady at $1.7 billion in both 2023 and 2022. Adjusting for notable items, 2023 Non-GAAP operating earnings stood at $1.9 billion or $5.13 per share.

The fourth quarter of 2023 presented some challenges, with net income attributable to Holdings reported at -$698 million, a significant drop from $62 million in the fourth quarter of 2022. However, non-GAAP operating earnings for the same period increased to $476 million compared to $348 million in the fourth quarter of 2022. Adjusting for notable items, fourth quarter 2023 Non-GAAP operating earnings were $479 million, or $1.34 per share.

Year-over-year revenue misses predictions

It’s fourth quarter non-GAAP earnings per share of $1.33 per share beat Wall Street analyst consensus estimates by $0.17. However, its revenue of $2.17 billion – up 14.2% year-over -year, missed predictions by $1.33 billion.

Looking ahead, Pearson said he is optimistic about the company's growth prospects.
"While we faced some short-term headwinds this past year, we expect non-GAAP operating earnings per share growth to accelerate in 2024, projecting increased cash generation of $1.4 billion to $1.5 billion,” he said. “This momentum is supported by the combination of organic growth within our retirement and wealth management businesses and continued execution against our strategic initiatives."

In late day trading Wednesday, Equitable shares were up nearly 3%, to $33.63 per share.

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].