U.S. life insurer
Prudential Financial Inc.
) reported second-quarter earnings of $2.49 per share, beating the
Zacks Consensus Estimate of $2.35. Earnings also grew 8.3% on a
Results benefited from strong growth in the Annuities, Retirement,
and Asset Management businesses as well as synergies from the
acquisition of the individual life business of Hartford Financial
Services Group, Inc. (HIG) in January last year. The company's
bottom-line strength was also supported by lower share count due to
Prudential Financial, Inc - Earnings Surprise |
Meanwhile, total revenue came in at $11.1 billion, down 5.2% year
over year primarily due to lower premium, partly offset by higher
policy charges and fee income, net investment income and asset
management fees and commissions. Reported revenues were, however,
in line with the Zacks Consensus Estimate.
Total benefits and expenses were $9.5 billion in the quarter, down
7% year over year. The decline was primarily led by a 12% fall in
insurance and annuity benefits.
Quarterly Segment Update
U.S. Retirement Solutions and Investment
reported adjusted operating income of $876 million, up 2.9% year
over year. The upside was driven by higher contribution from
Retirement and Asset Management segments.
Adjusted operating income at
U.S. Individual Life and Group Insurance
increased 25.2% year over year to $204 million, led by strong
contribution from its Group Insurance sub-segment, along with
growth in the Individual Life insurance segment.
Adjusted operating income at
increased 4% year over year to $884 million led by improved
revenues from both Life Planner and Gibraltar operations.
Corporate and Other Operations
' adjusted loss stood at $341 million, compared with a loss of $347
million recorded in the year-ago quarter.
Meanwhile, Prudential's assets under management increased 5.3% year
over year to $1.17 trillion as of Jun 30, 2014.
Adjusted book value per share as of Jun 30, 2014, was $63.67, up
5.8% from the Dec 2013 level.
During the second quarter, the company bought back 3.0 million
shares of its common stock for $250 million.
Prudential presently carries a Zacks Rank #3 (Hold).
Prudential has a well diversified business profile with an
extensive reach across different markets. The company is positioned
to benefit from a rise in share of aging Americans. Moreover, the
acquisition of the Hartford Individual Life Insurance business
remains on track and will boost Prudential's individual life
insurance in the U.S.
Prudential's presence in Japan, South Korea and Brazil is also
expected to aid long-term growth.
Additionally, Prudential's Retirement segment is set to largely
benefit from its entry into the pension risk transfer business
deals with General Motors Co., Verizon Communications Inc. and
Other Insurance Stocks
Other life insurance players like Lincoln National Corporation (
) and Protective Life Corp. (
) reported favorable second-quarter earnings, beating the Zacks
Consensus Estimate by 10 cents and 11 cents, respectively. On the
other hand, MetLife Inc.'s (
) earnings missed the Zacks Consensus Estimate by 2 cents.
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METLIFE INC (MET): Free Stock Analysis Report
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