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Prudential Financial (PRU) Down 2.2% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Prudential Financial, Inc. (PRU - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Prudential Financial Q1 Earnings Beat, Revenues Up Y/Y
Prudential Financial Inc.’s first-quarter 2017 operating income of $2.79 per share beat the Zacks Consensus Estimate by 5.7%. Earnings also improved about 28% year over year.
Including the impact of one-time items, net income was $3.09 per share, up 5.5% year over year.
Total revenue grew 6.3% year over year to $12 billion due to 3.5% growth in premiums, 2.9% increase in policy charges and fee income, 11.2% increase in net investment income, and 11.5 % rise in asset management fees, commissions and other income.
Total benefits and expenses of $10.3 billion increased 3.8% year over year in the quarter. The rise in expenses is mainly attributable to higher insurance and annuity benefits, interest credited to policyholders’ account balances, deferral of acquisition costs, amortization of acquisition costs and general and administrative expenses.
Quarterly Segment Update
U.S. Retirement Solutions and Investment Management reported adjusted operating income of $1.1 billion, up 49% year over year. The upside was driven by higher contribution from Individual Annuities, Retirement, and Asset Management businesses.
U.S. Individual Life and Group Insurance reported adjusted operating income of $152 million, up 4.1% from the prior-year quarter. Higher contribution from Group Insurance drove the upside.
International Insurance reported adjusted operating income of $799 million, up 2.6% year over year. The improvement was due to higher contribution from Gibraltar Life and Other operations.
Corporate and Other Operations reported adjusted operating loss of $352 million, wider than a loss of $312 million in the year-ago quarter.
As of Mar 31, 2017, Prudential Financial’s assets under management increased 2.8% to $1.299 trillion from $1.264 trillion as of Dec 31, 2016. Adjusted book value, a measure of the company’s net worth, increased 7% to $80.77 per share as of Mar 31, 2017, from $75.46 per share as of Dec 31, 2016.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter, while looking back an additional 30 days, we can see even more upward momentum. There have been two moves higher in the last two months.
At this time, Prudential Financial's stock has a poor Growth Score of 'F'. However, its Momentum is doing better with a 'C'. The stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is more suitable for value investors than momentum investors based on our style scores.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions indicates a downward shift. The stock has a Zacks Rank #2 (Buy). We expect above average returns from the stock in the next few months.
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Prudential Financial (PRU) Down 2.2% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Prudential Financial, Inc. (PRU - Free Report) . Shares have lost about 2.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Prudential Financial Q1 Earnings Beat, Revenues Up Y/Y
Prudential Financial Inc.’s first-quarter 2017 operating income of $2.79 per share beat the Zacks Consensus Estimate by 5.7%. Earnings also improved about 28% year over year.
Including the impact of one-time items, net income was $3.09 per share, up 5.5% year over year.
Total revenue grew 6.3% year over year to $12 billion due to 3.5% growth in premiums, 2.9% increase in policy charges and fee income, 11.2% increase in net investment income, and 11.5 % rise in asset management fees, commissions and other income.
Total benefits and expenses of $10.3 billion increased 3.8% year over year in the quarter. The rise in expenses is mainly attributable to higher insurance and annuity benefits, interest credited to policyholders’ account balances, deferral of acquisition costs, amortization of acquisition costs and general and administrative expenses.
Quarterly Segment Update
U.S. Retirement Solutions and Investment Management reported adjusted operating income of $1.1 billion, up 49% year over year. The upside was driven by higher contribution from Individual Annuities, Retirement, and Asset Management businesses.
U.S. Individual Life and Group Insurance reported adjusted operating income of $152 million, up 4.1% from the prior-year quarter. Higher contribution from Group Insurance drove the upside.
International Insurance reported adjusted operating income of $799 million, up 2.6% year over year. The improvement was due to higher contribution from Gibraltar Life and Other operations.
Corporate and Other Operations reported adjusted operating loss of $352 million, wider than a loss of $312 million in the year-ago quarter.
As of Mar 31, 2017, Prudential Financial’s assets under management increased 2.8% to $1.299 trillion from $1.264 trillion as of Dec 31, 2016. Adjusted book value, a measure of the company’s net worth, increased 7% to $80.77 per share as of Mar 31, 2017, from $75.46 per share as of Dec 31, 2016.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter, while looking back an additional 30 days, we can see even more upward momentum. There have been two moves higher in the last two months.
Prudential Financial, Inc. Price and Consensus
Prudential Financial, Inc. Price and Consensus | Prudential Financial, Inc. Quote
VGM Scores
At this time, Prudential Financial's stock has a poor Growth Score of 'F'. However, its Momentum is doing better with a 'C'. The stock was allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is more suitable for value investors than momentum investors based on our style scores.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions indicates a downward shift. The stock has a Zacks Rank #2 (Buy). We expect above average returns from the stock in the next few months.