Life insurer Prudential Financial Inc.’s (PRU) second quarter operating income of $1.51 per share was ahead of the Zacks Consensus Estimate of $1.31. Earnings were, however, down from $1.87 per share in the year-ago quarter. Results for the quarter benefited from strong annuity sales, higher investment income and asset management fees.
Prudential’s revenues of $8.7 billion came in much higher than the Zacks Consensus Estimate of $7.2 billion. On a year-over-year basis, revenues jumped 39%, primarily due to higher asset management fees, commissions and other income.
Premiums written increased 15.2% to $3.8 billion. Net investment income also increased 3% to $2.1 billion. Assets under management increased 19% year over year to $690 billion, led by increased net new flows and an overall improvement in markets.
Book value per share, a closed watch measure of the company’s performance, increased to $59.94 from $40.20 in the prior-year quarter.
The U.S. Retirement Solutions and Investment Management division’s operating income of $552 million decreased 2.1% from $564 million in the prior-year quarter. This was primarily due to a substantial decline in Individual Annuities, partially offset by increased contribution from Retirement and Asset Management’s operating income. Premiums earned increased 50% to $391 million.
The U.S. Individual Life and Group Insurance division operating income halved to $120 million from $243 million in the prior-year quarter. The decline was led by a 69% decline in contribution from Group Insurance segment coupled with a 36% decline in contribution from Individual Life business. Premiums earned increased 3.0% to $1.2 billion.
The International Insurance and Investments division operating income of $478 million, almost unchanged from $476 million in the prior-year quarter. Premiums earned were up 17% to $2.2 billion.
Prudential has a balanced portfolio of business with favorable growth and return prospects. The company is gaining ground with strong sales and asset flows across the board. It also stands to benefit from strong capital position and significant financial flexibility which positions it to pursue organic growth as well as consider appropriate acquisition opportunities.
PRUDENTIAL FINL (PRU): Free Stock Analysis Report
Zacks Investment Research
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Premiums written increased 15.2% to $3.8 billion. Net investment income also increased 3% to $2.1 billion. Assets under management increased 19% year over year to $690 billion, led by increased net new flows and an overall improvement in markets.
Book value per share, a closed watch measure of the company’s performance, increased to $59.94 from $40.20 in the prior-year quarter.
The U.S. Retirement Solutions and Investment Management division’s operating income of $552 million decreased 2.1% from $564 million in the prior-year quarter. This was primarily due to a substantial decline in Individual Annuities, partially offset by increased contribution from Retirement and Asset Management’s operating income. Premiums earned increased 50% to $391 million.
The U.S. Individual Life and Group Insurance division operating income halved to $120 million from $243 million in the prior-year quarter. The decline was led by a 69% decline in contribution from Group Insurance segment coupled with a 36% decline in contribution from Individual Life business. Premiums earned increased 3.0% to $1.2 billion.
The International Insurance and Investments division operating income of $478 million, almost unchanged from $476 million in the prior-year quarter. Premiums earned were up 17% to $2.2 billion.
Prudential has a balanced portfolio of business with favorable growth and return prospects. The company is gaining ground with strong sales and asset flows across the board. It also stands to benefit from strong capital position and significant financial flexibility which positions it to pursue organic growth as well as consider appropriate acquisition opportunities.
PRUDENTIAL FINL (PRU): Free Stock Analysis Report
Zacks Investment Research
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