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What's in Store for Prudential (PRU) This Earnings Season?
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Prudential Financial, Inc. (PRU - Free Report) is slated to report third-quarter 2023 earnings on Nov 1, after market close. PRU delivered a negative earnings surprise in the last reported quarter.
Factors to Consider
The U.S. business is likely to have benefited from a positive impact from annual assumption updates, higher spread income and more favorable underwriting. The upside is expected to have been partially offset by the absence of a one-time gain from the sale of PALAC in the prior-year quarter and lower fee income.
Prudential Financial’s international businesses are likely to have benefited from a favorable impact from annual assumption updates and other refinements. The upside is likely to have been partially offset by lower net investment spread results.
Group Insurance business in the to-be-reported quarter is likely to have benefited from higher underwriting results. The upside is expected to have been partially offset by higher expenses.
PGIM is likely to have decreased due to lower net asset management fees and higher compensation and operating expenses. The downside is likely to have been partially offset by higher net other related revenues and service, distribution and other revenues.
Assets under management are likely to have benefited from equity market appreciation, lower interest rates and tightening credit spreads, partially offset by net outflows.
Net investment income is likely to have gained from higher reinvestment and short-term rates. The upside is likely to have been partially offset by lower income on non-coupon investments. We expect net investment income to increase 6.6% to $3.2 billion in the to-be-reported quarter.
Expenses are likely to have increased because of higher general and administrative expenses, amortization of deferred policy acquisition costs and interest credited to policyholders’ account balances. We expect total expenses to decrease 43.7% to $11.2 billion.
The Individual Retirement Strategies business is likely to have been affected by the absence of a gain in the prior-year period from the sale of PALAC and lower fee income, net of distribution expenses and other associated costs, resulting from lower average separate account values due to net outflows and the impact of the PDI reinsurance transaction. The downside is likely to have been partially offset by higher net investment spread results and growth in indexed variable annuities.
The company estimates earnings per share to be $3.35 for the third quarter of 2023.
The Zacks Consensus Estimate for earnings per share is pegged at $3.16, indicating an increase of 48.3% from the year-ago period’s reported figure.
The Zacks Consensus Estimate for revenues is pegged at $12.91 billion, indicating a decline of 40.3% from the year-ago reported figure.
What Our Quantitative Model Unveils
Our proven model does not predict an earnings beat for Prudential Financial this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case here as you can see below.
Earnings ESP: Prudential Financial has an Earnings ESP of -0.43%. This is because the Most Accurate Estimate of $3.15 is pegged lower than the Zacks Consensus Estimate of $3.16. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ACT’s earnings beat estimates in three of the last four quarters and missed in the other one.
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +4.02% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.55, indicating a year-over-year increase of 134.8%.
AIG’s earnings beat estimates in each of the last four quarters.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $4, indicating a year-over-year increase of 10,100%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
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What's in Store for Prudential (PRU) This Earnings Season?
Prudential Financial, Inc. (PRU - Free Report) is slated to report third-quarter 2023 earnings on Nov 1, after market close. PRU delivered a negative earnings surprise in the last reported quarter.
Factors to Consider
The U.S. business is likely to have benefited from a positive impact from annual assumption updates, higher spread income and more favorable underwriting. The upside is expected to have been partially offset by the absence of a one-time gain from the sale of PALAC in the prior-year quarter and lower fee income.
Prudential Financial’s international businesses are likely to have benefited from a favorable impact from annual assumption updates and other refinements. The upside is likely to have been partially offset by lower net investment spread results.
Group Insurance business in the to-be-reported quarter is likely to have benefited from higher underwriting results. The upside is expected to have been partially offset by higher expenses.
PGIM is likely to have decreased due to lower net asset management fees and higher compensation and operating expenses. The downside is likely to have been partially offset by higher net other related revenues and service, distribution and other revenues.
Assets under management are likely to have benefited from equity market appreciation, lower interest rates and tightening credit spreads, partially offset by net outflows.
Net investment income is likely to have gained from higher reinvestment and short-term rates. The upside is likely to have been partially offset by lower income on non-coupon investments. We expect net investment income to increase 6.6% to $3.2 billion in the to-be-reported quarter.
Expenses are likely to have increased because of higher general and administrative expenses, amortization of deferred policy acquisition costs and interest credited to policyholders’ account balances. We expect total expenses to decrease 43.7% to $11.2 billion.
The Individual Retirement Strategies business is likely to have been affected by the absence of a gain in the prior-year period from the sale of PALAC and lower fee income, net of distribution expenses and other associated costs, resulting from lower average separate account values due to net outflows and the impact of the PDI reinsurance transaction. The downside is likely to have been partially offset by higher net investment spread results and growth in indexed variable annuities.
The company estimates earnings per share to be $3.35 for the third quarter of 2023.
The Zacks Consensus Estimate for earnings per share is pegged at $3.16, indicating an increase of 48.3% from the year-ago period’s reported figure.
The Zacks Consensus Estimate for revenues is pegged at $12.91 billion, indicating a decline of 40.3% from the year-ago reported figure.
What Our Quantitative Model Unveils
Our proven model does not predict an earnings beat for Prudential Financial this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This is not the case here as you can see below.
Earnings ESP: Prudential Financial has an Earnings ESP of -0.43%. This is because the Most Accurate Estimate of $3.15 is pegged lower than the Zacks Consensus Estimate of $3.16. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Prudential Financial, Inc. Price and EPS Surprise
Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote
Zacks Rank: PRU has a Zacks Rank #3 at present.
Stocks to Consider
Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Enact Holdings, Inc. (ACT - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at 86 cents, indicating a year-over-year decline of 26.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACT’s earnings beat estimates in three of the last four quarters and missed in the other one.
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +4.02% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.55, indicating a year-over-year increase of 134.8%.
AIG’s earnings beat estimates in each of the last four quarters.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $4, indicating a year-over-year increase of 10,100%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.