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Prudential Financial's Q4 Earnings Miss Estimates, Down Y/Y

Prudential Financial Inc.PRU reported fourth-quarter 2015 after tax adjusted operating income of $1.94 per share that missed the Zacks Consensus Estimate by 14.5%. Earnings also decreased 8.5% year over year due to lower revenues.

Prudential Financial Inc. (PRU) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Including the impact of one-time items, net income came in at $1.60 per share. The company had posted a loss of $2.69 million in the year-ago quarter.

Total revenue decreased 16.3% year over year to $13.2 billion due to lower premiums (down 24.2%), policy charges and fee income (down 4.2%), net investment income (down 1.9%) and asset management fees, commissions and other income (down 4.9%). Nonetheless, the top line surpassed the Zacks Consensus Estimate of $11.6 billion.

Total benefits and expenses were $12.1 billion in the quarter, down 16.7% year over year. The decrease was due to lower insurance and annuity benefits (down 23%), interest credited to policyholders' account balances (down 4.4%), interest expense (down 1.8%) and other expenses (down 0.41%)

Full-Year Highlights

Prudential Financial's adjusted operating income for 2015 came in at $10.04 per share, up 9.01% year over year.

Total revenues climbed 2.04% year over year to $48.6 billion.

Quarterly Segment Update

U.S. Retirement Solutions and Investment Management reported adjusted operating income of $776 million, down 5.7% year over year. The downside can be attributed to a lower contribution from Retirement business.

U.S. Individual Life and Group Insurance reported adjusted operating income of $126 million, down 22.2% from year-ago quarter. Lower income in both Group Insurance and Individual Life segment resulted in the underperformance.

International Insurance reported adjusted operating income of $738 million, up 7.6% year over year. The increase was due to higher profits at Gibraltar Life, and Other operations.

Corporate and Other Operations reported adjusted operating loss of $458 million, wider than a loss of $326 million in the year-ago quarter.

Prudential Financial's assets under management inched up 0.7% from year-end 2014 to $1.184 trillion as of Dec 31, 2015. Book value, a measure of the company's net worth, was $73.59 at Dec 31 2015 compared with $64.75 as of Dec 31, 2014.

Share Repurchase and Dividend Update

During the fourth quarter, Prudential spent $250 million to buy back 3.1 million shares. From Jul 2011 through Dec 2015, the company bought back 65 million shares for $4.4 billion.

Dividend

The company's board of directors approved a 21% hike of its quarterly dividend to 70 cents per share.

Performance of Other Multi-Line Insurers

The bottom line at CNO Financial Group, Inc. CNO and The Hartford Financial Services Group, Inc. HIG beat their respective Zacks Consensus Estimate, while Assurant, Inc. AIZ missed the same in the fourth quarter.

Zacks Rank

Prudential carries a Zacks Rank #3 (Hold).

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ASSURANT INC (AIZ): Free Stock Analysis Report

HARTFORD FIN SV (HIG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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