Back to top

Analyst Blog

Prudential Financial Inc.’s (PRU - Analyst Report) adjusted operating earnings for the first quarter of 2013 came in at $2.28 per share, higher than the Zacks Consensus Estimate of $1.89. Results also exceeded the year-ago earnings of $1.61 per share.

Including realized investment losses, net, and related charges and adjustments of $6.37, investment gains on trading account assets supporting insurance liabilities, net, of 20 cents, change in experience-rated contract holder liabilities due to asset value changes of 30 cents, income from divested business of 7 cents and difference in earnings allocated to participating unvested share-based payment awards of 2 cents, Prudential reported net loss of $1.55 per share in the first quarter of 2013. This was narrower than the prior-year loss of $2.03.

Quarterly Operational Update

Total revenue reported by Prudential was $11.8 billion, up 12.8% year over year, attributable to higher premiums (up 5.8% year over year), policy charges and fee income (up 32.2% year over year), net investment income (up 12.8% year over year), and asset management fees, commissions and other income (up 34.4% year over year). However, results were below the Zacks Consensus Estimate of $12.5 billion.

Total benefits and expenses were $10.4 billion in the quarter, up 9.6% year over year. Higher insurance and annuity benefits (up 15.5%), interest credited to policyholders' account balances (up 1.9%), interest expense (up 6.2%) and other expenses (up 0.7%) led to the upside.

Quarterly Segment Update

The U.S. Retirement Solutions and Investment Management division, which houses Individual Annuities, Retirement, and Asset Management, represents approximately 35.6% of Prudential’s total revenue. The segment reported adjusted operating income of $775 million, up 9.9% year over year.

Adjusted operating income at the U.S. Individual Life and Group Insurance division increased 102.8% year over year to $146 million.

The International Insurance division’s adjusted operating income increased 46.9% year over year to $877 million, attributable to higher contribution from both Gibraltar Life and Life Planners insurance operations.

The Corporate and Other operations’ adjusted loss was $314 million in the first quarter of 2013 narrower than the loss of $326 million the year-ago quarter.

Prudential’s Assets under management increased 0.1% to $1.061 trillion as of Mar 31, 2013 from $1.060 trillion at Dec 31, 2012.

Prudential’s Closed Block Business posted pretax operating income of $19 million, down 36.7% year over year.

Financial Position

As of Mar 31, 2013 Prudential had assets under management and administration worth $1.2 trillion, up 15.2% year over year.

Adjusted book value per share was $55.94, down 3.3% from $57.86 at year end 2012.


In Jan 2013, Prudential acquired the individual life insurance business of The Hartford Financial Services Group Inc. (HIG - Analyst Report) for $615 million through a reinsurance transaction.

Performance of Other Stocks

AXIS Capital Holdings Limited (AXS - Analyst Report) reported first-quarter 2013 net operating income of $1.92 per share, which breezed past the Zacks Consensus Estimate of $1.19. Earnings surged 79% year over year. Net operating income of $227 million improved nearly 70% year over year.

Montpelier Re Holdings Ltd. (MRH - Analyst Report) reported first-quarter 2013 operating income of $1.18 per share, better than the Zacks Consensus Estimate of 89 cents. However, earnings were 4.1% lower than $1.23 per share in the year-ago quarter.

Zacks Rank

Prudential’s stock carries a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GTT COMMUNI… GTT 11.65 +4.11%
ALLERGAN IN… AGN 161.82 +3.99%
CLAYTON WIL… CWEI 117.06 +3.73%
GREENBRIER… GBX 69.63 +2.37%
RF MICRO DE… RFMD 12.02 +2.04%