Principal Fin. Shares Fall After Lower 2008 View

NEW YORK (Reuters) - Principal Financial Group (PFG.N: Quote, Profile, Research) shares fell on Thursday, a day after the retirement insurer's chief executive told investors to expect lower earnings in 2008 due to recent equity market weakness.

The Des Moines, Iowa-based insurer said in a statement on Wednesday that it expects 2008 net income to range from $3.95 to $4.20 per share.

Operating earnings per diluted share, the yardstick used by analysts, is expected to be between $4.20 to $4.45 a share.

Analysts on average had expected Principal, one of the largest U.S. providers of retirement and life and health insurance, to earn $4.47 a share from operations, according to Reuters Estimates.

In noon trading, Principal Financial shares were down $4.61, or 6.6 percent, to $65.29 on the New York Stock Exchange.

Chief Executive J. Barry Griswell said "a meaningful drop in the Standard & Poor's 500 index since the end of the third quarter" was the reason for the lower estimate. Since Sept. 30, the S&P 500 has lost about 3.8 percent.

However, Griswell said in a statement he was still committed to long-term annual earnings growth of 11 percent to 13 percent.

For 2007, analysts expect Principal Financial to earn $4.10 per share in operating earnings, up 16.3 percent from the year earlier.

(Reporting by Ed Leefeldt; Editing by Tim Dobbyn)