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Prudential (PRU) Q1 Earnings and Revenues Miss Estimates
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Prudential Financial, Inc.’s (PRU - Free Report) first-quarter 2019 operating net income of $3.00 per share missed the Zacks Consensus Estimate by 4.5%. The bottom line also declined 2.6% year over year.
The company witnessed weak performances in PGIM and U.S. Workplace Solutions segments.
Including one-time items, net income per share of $3.14 declined 29% year over year.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Total revenues of $13.6 billion grew 6% year over year on the back of higher premiums and net investment income. However, the top line missed the Zacks Consensus Estimate of $13.7 billion.
Total benefits and expenses of $11.2 billion increased 8% year over year in the quarter. This increase in expenses was mainly attributable to higher insurance and annuity benefits, interest credited to policyholders’ account balances, interest expense, general and administrative expenses and amortization of acquisition costs.
Quarterly Segment Update
PGIM — global investment management businesses — reported adjusted operating income of $214 million, down 7.8% year over year. This downside was attributable to higher expenses, partially offset by higher asset management fees, reflecting an increase in average assets under management.
PGIM assets under management were $1.2 trillion at the end of the reported quarter.
U.S. Workplace Solutions’ adjusted operating income was $304 million, down 18.3% from the year-ago quarter on lower contribution from Retirement segment and Group Insurance segments.
U.S. Individual Solutions reported adjusted operating income of $577 million, up nearly 4% from the prior-year quarter, driven by higher contribution from Individual Life, partially offset by lower earnings from Individual Annuities.
International Insurance delivered adjusted operating income of $922 million, up 7.7% from the year-earlier period owing to higher income at both Life Planner Operations and Gibraltar Life & Other Operations.
Corporate and Other Operations incurred adjusted operating loss of $412 million, wider than loss of $294 million in the year-ago quarter.
Financial Update
Cash and cash equivalents of $14.7 billion at quarter end decreased 6.8% year over year.
As of Mar 31, 2019, Prudential Financial’s assets under management and administration increased 4.8% to $1.5 trillion year over year.
Adjusted book value, a measure of the company’s net worth, came in at $96.76 as of Mar 31, 2019, up 3.4% year over year.
Operating return on average equity was 12.6%, almost matching the higher end of 12-13% target.
Debt balance totaled $20.9 billion as of Mar 31, 2019, up 5.2% year over year.
Prudential Financial deployed $500 million in share buybacks and increased dividend by 11%.
Among the other insurance industry players, which have reported first-quarter results, earnings of Aflac Incorporated (AFL - Free Report) and Torchmark Corporation beat their respective Zacks Consensus Estimate while Reinsurance Group of America Incorporated (RGA - Free Report) missed the same.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Prudential (PRU) Q1 Earnings and Revenues Miss Estimates
Prudential Financial, Inc.’s (PRU - Free Report) first-quarter 2019 operating net income of $3.00 per share missed the Zacks Consensus Estimate by 4.5%. The bottom line also declined 2.6% year over year.
The company witnessed weak performances in PGIM and U.S. Workplace Solutions segments.
Including one-time items, net income per share of $3.14 declined 29% year over year.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Prudential Financial, Inc. Price, Consensus and EPS Surprise | Prudential Financial, Inc. Quote
Behind the Headlines
Total revenues of $13.6 billion grew 6% year over year on the back of higher premiums and net investment income. However, the top line missed the Zacks Consensus Estimate of $13.7 billion.
Total benefits and expenses of $11.2 billion increased 8% year over year in the quarter. This increase in expenses was mainly attributable to higher insurance and annuity benefits, interest credited to policyholders’ account balances, interest expense, general and administrative expenses and amortization of acquisition costs.
Quarterly Segment Update
PGIM — global investment management businesses — reported adjusted operating income of $214 million, down 7.8% year over year. This downside was attributable to higher expenses, partially offset by higher asset management fees, reflecting an increase in average assets under management.
PGIM assets under management were $1.2 trillion at the end of the reported quarter.
U.S. Workplace Solutions’ adjusted operating income was $304 million, down 18.3% from the year-ago quarter on lower contribution from Retirement segment and Group Insurance segments.
U.S. Individual Solutions reported adjusted operating income of $577 million, up nearly 4% from the prior-year quarter, driven by higher contribution from Individual Life, partially offset by lower earnings from Individual Annuities.
International Insurance delivered adjusted operating income of $922 million, up 7.7% from the year-earlier period owing to higher income at both Life Planner Operations and Gibraltar Life & Other Operations.
Corporate and Other Operations incurred adjusted operating loss of $412 million, wider than loss of $294 million in the year-ago quarter.
Financial Update
Cash and cash equivalents of $14.7 billion at quarter end decreased 6.8% year over year.
As of Mar 31, 2019, Prudential Financial’s assets under management and administration increased 4.8% to $1.5 trillion year over year.
Adjusted book value, a measure of the company’s net worth, came in at $96.76 as of Mar 31, 2019, up 3.4% year over year.
Operating return on average equity was 12.6%, almost matching the higher end of 12-13% target.
Debt balance totaled $20.9 billion as of Mar 31, 2019, up 5.2% year over year.
Prudential Financial deployed $500 million in share buybacks and increased dividend by 11%.
Zacks Rank
Prudential Financial currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among the other insurance industry players, which have reported first-quarter results, earnings of Aflac Incorporated (AFL - Free Report) and Torchmark Corporation beat their respective Zacks Consensus Estimate while Reinsurance Group of America Incorporated (RGA - Free Report) missed the same.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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