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Prudential Financial (PRU - Free Report) reported second-quarter 2024 adjusted operating income of $3.39 per share, which missed the Zacks Consensus Estimate by 1.2%. The bottom line climbed 15.3% year over year.
Total revenues of $13.8 billion jumped 9.5% year over year, beating the Zacks Consensus Estimate by 0.4%. The rise in revenues was due to higher premiums, net investment income, and policy charges and other income.
Prudential Financial's quarterly results reflected a rise in asset management fees, positive third-party net flows, improved net investment spread results and favorable underwriting results, offset by higher expenses.
Total benefits and expenses amounted to $12.2 billion, which rose 9.9% year over year in the second quarter. This increase was due to higher insurance and annuity benefits, interest credited to policyholders' account balances, interest expense and amortization of acquisition costs. The figure was higher than our estimate of $11.5 billion.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Prudential Global Investment Management’s (PGIM) adjusted operating income of $206 million increased 15.1% year over year. The Zacks Consensus Estimate was $221 million. Our estimate was $218 million. This increase primarily reflects higher asset management fees and higher other related revenues, driven by higher transaction fees and incentive fees, partially offset by higher expenses.
PGIM’s assets under management of $1.328 trillion were up 5% year over year, primarily resulting from equity market appreciation, investment performance and affiliated net inflows.
The U.S. Businesses delivered an adjusted operating income of $1.1 billion, which grew 11.9% year over year. The metric beat the Zacks Consensus Estimate by 1.1%. Our estimate was $1 billion. This increase reflects higher net investment spread results, more favorable underwriting and lower expenses, partially offset by lower net fee income.
International Businesses’ adjusted operating income declined 10.5% year over year to $702 million in the second quarter. Our estimate was $751.1 million. The decline reflects less favorable underwriting results and lower net investment spread results, partially offset by higher joint venture earnings.
Corporate and Other incurred an adjusted operating loss of $371 million, narrower than a loss of $472 million reported a year ago, reflecting lower expenses, including a reduction in legal reserves and higher income from pension and other employee benefit plans. The Zacks Consensus Estimate was a loss of $419.8 million and our estimate was a loss of $471.3 million.
Capital Deployment
Prudential Financial returned $725 million in capital to its shareholders in the form of share repurchases worth $250 million and dividends worth $475 million in the second quarter.
Financial Update
PRU exited the second quarter with cash and cash equivalents of $17.1 billion, which decreased 16.9% from the end of 2023.
Total debt balance of $19.9 billion increased 1.4% from 2023-end.
As of Jun 30, 2024, Prudential Financial’s assets under management and administration rose 4.7% year over year to $1.482 trillion.
Adjusted book value per common share, a measure of the company’s net worth, came in at $98.42, which decreased 1.1% year over year.
Operating return on average equity was 12.8% in the second quarter, which contracted 110 basis points year over year.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. Pretax income of $912 million increased 35.7% year over year in the second quarter.
Radian Group Inc. (RDN - Free Report) reported second-quarter 2024 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 13.8%. Moreover, the bottom line increased 8.8% year over year. Operating revenues increased 12.3% year over year to $325.6 million due to higher net premiums earned, services revenues and net investment income.
Net premiums earned were $237.7 million, up 11.4% year over year. MI New Insurance Written decreased 18% year over year to $13.9 billion. Primary mortgage insurance in force increased 2.2% year over year to $272.8 billion.
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year. MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year. The top line beat the consensus mark by 0.6%.
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion. The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans. Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million.
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Prudential Financial (PRU) Q2 Earnings Miss, Revenues Beat
Prudential Financial (PRU - Free Report) reported second-quarter 2024 adjusted operating income of $3.39 per share, which missed the Zacks Consensus Estimate by 1.2%. The bottom line climbed 15.3% year over year.
Total revenues of $13.8 billion jumped 9.5% year over year, beating the Zacks Consensus Estimate by 0.4%. The rise in revenues was due to higher premiums, net investment income, and policy charges and other income.
Prudential Financial's quarterly results reflected a rise in asset management fees, positive third-party net flows, improved net investment spread results and favorable underwriting results, offset by higher expenses.
Total benefits and expenses amounted to $12.2 billion, which rose 9.9% year over year in the second quarter. This increase was due to higher insurance and annuity benefits, interest credited to policyholders' account balances, interest expense and amortization of acquisition costs. The figure was higher than our estimate of $11.5 billion.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Prudential Financial, Inc. price-consensus-eps-surprise-chart | Prudential Financial, Inc. Quote
Quarterly Segment Update
Prudential Global Investment Management’s (PGIM) adjusted operating income of $206 million increased 15.1% year over year. The Zacks Consensus Estimate was $221 million. Our estimate was $218 million. This increase primarily reflects higher asset management fees and higher other related revenues, driven by higher transaction fees and incentive fees, partially offset by higher expenses.
PGIM’s assets under management of $1.328 trillion were up 5% year over year, primarily resulting from equity market appreciation, investment performance and affiliated net inflows.
The U.S. Businesses delivered an adjusted operating income of $1.1 billion, which grew 11.9% year over year. The metric beat the Zacks Consensus Estimate by 1.1%. Our estimate was $1 billion. This increase reflects higher net investment spread results, more favorable underwriting and lower expenses, partially offset by lower net fee income.
International Businesses’ adjusted operating income declined 10.5% year over year to $702 million in the second quarter. Our estimate was $751.1 million. The decline reflects less favorable underwriting results and lower net investment spread results, partially offset by higher joint venture earnings.
Corporate and Other incurred an adjusted operating loss of $371 million, narrower than a loss of $472 million reported a year ago, reflecting lower expenses, including a reduction in legal reserves and higher income from pension and other employee benefit plans. The Zacks Consensus Estimate was a loss of $419.8 million and our estimate was a loss of $471.3 million.
Capital Deployment
Prudential Financial returned $725 million in capital to its shareholders in the form of share repurchases worth $250 million and dividends worth $475 million in the second quarter.
Financial Update
PRU exited the second quarter with cash and cash equivalents of $17.1 billion, which decreased 16.9% from the end of 2023.
Total debt balance of $19.9 billion increased 1.4% from 2023-end.
As of Jun 30, 2024, Prudential Financial’s assets under management and administration rose 4.7% year over year to $1.482 trillion.
Adjusted book value per common share, a measure of the company’s net worth, came in at $98.42, which decreased 1.1% year over year.
Operating return on average equity was 12.8% in the second quarter, which contracted 110 basis points year over year.
Zacks Rank
Prudential Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported second-quarter 2024 adjusted operating earnings of $2.50 per share, which beat the Zacks Consensus Estimate by 10.6%. The bottom line climbed 33% year over year. Operating revenues of HIG amounted to $4.46 billion, which improved 9.4% year over year in the quarter under review. However, the top line missed the consensus mark of $4.49 billion.
Earned premiums of Hartford Financial rose 6.9% year over year to $5.6 billion in the second quarter but missed the Zacks Consensus Estimate by 0.9%. Pretax income of $912 million increased 35.7% year over year in the second quarter.
Radian Group Inc. (RDN - Free Report) reported second-quarter 2024 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 13.8%. Moreover, the bottom line increased 8.8% year over year. Operating revenues increased 12.3% year over year to $325.6 million due to higher net premiums earned, services revenues and net investment income.
Net premiums earned were $237.7 million, up 11.4% year over year. MI New Insurance Written decreased 18% year over year to $13.9 billion. Primary mortgage insurance in force increased 2.2% year over year to $272.8 billion.
MGIC Investment Corporation (MTG - Free Report) reported second-quarter 2024 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 24.2%. Moreover, the bottom line increased 13.2% year over year. MGIC Investment recorded total operating revenues of $306 million, which increased 3.4% year over year. The top line beat the consensus mark by 0.6%.
Insurance in force decreased 0.3% from the prior-year quarter to $291.6 billion, which missed the Zacks Consensus Estimate of $295.26 billion. The insurer witnessed a 1.9% year-over-year decrease in primary delinquency to 23,370 loans. Net premiums written increased 0.9% year over year to $233.5 million. The figure was lower than our estimate of $238.5 million.