Equitable Q2 Earnings Call Highlights

Second-quarter operating earnings rose: Equitable reported $488 million in non-GAAP operating earnings, or $1.70 per share, while assets under management and administration reached a record $1.2 trillion.

The company returned $449 million to shareholders, including $366 million in buybacks.

Business momentum remained broad-based: Retirement generated $1.7 billion in net inflows, Wealth Management delivered $2 billion in advisory inflows, and AllianceBernstein returned to positive organic growth with $800 million in net inflows.

Corebridge merger planning is advancing: Shareholders approved the transaction with more than 97% support, and Equitable remains on track to close by the end of 2026.

Management is planning integration, cost and revenue synergies, with targets including at least 10% earnings and cash-flow-per-share accretion by the end of 2028.

Equitable NYSE: EQH said second-quarter operating earnings rose as the company advanced its pending merger with Corebridge and reported positive net flows across all of its business segments.

Shareholders of both companies approved the transaction on July 30, and Equitable said it remains on track to close the merger by the end of 2026.

President and Chief Executive Officer Mark Pearson said the company has established the first three levels of management for the combined organization and begun integration planning, including work on expense, revenue and capital synergies.

More than 97% of voting shareholders supported the transaction, and federal antitrust review has been completed, according to the company.

“We remain focused on achieving our 2026 financial targets and are not treating this as a gap year,” Pearson said.

Equitable reported non-GAAP operating earnings of $488 million, or $1.70 per share, for the second quarter.

Excluding notable items, operating earnings were $1.75 per share, up 24% from a year earlier.

The company reported a net loss of $453 million, which Chief Financial Officer Robin Raju attributed to non-economic hedge portfolio impacts resulting from strong equity markets.

Notable items included $49 million of below-plan alternative investment returns, partly offset by a $35 million benefit from favorable tax items.

Equitable’s alternative-investment portfolio, representing about 2% of its total general account, generated an annualized return slightly above 1% during the quarter.

Raju said private-equity results were affected by the lagged effect of first-quarter market declines.

The company expects alternative-investment returns to improve in the second half, though it plans to provide more detailed guidance later in the quarter.

Equitable’s consolidated tax rate was 15% in the second quarter, aided by tax planning, but management expects a more typical rate of about 20% in the third quarter.

Assets under management and administration reached a record $1.2 trillion, up 10% year over year, supported by favorable equity markets and net inflows.

Equitable returned $449 million of capital to shareholders during the quarter, including $366 million in share repurchases.

Its quarterly payout ratio was 92%, while its first-half payout ratio was 70%.

The company continues to target a full-year payout ratio of 60% to 70%.

Equitable ended the quarter with $800 million of cash and liquid assets at the holding company and said its estimated combined NAIC risk-based capital ratio remained well above its 400% target operating level.

Management reaffirmed its goal of generating roughly $1.8 billion of holding-company c...