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Prudential (PRU) Q3 Earnings Beat Estimates, Revenues Miss
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Prudential Financial, Inc.’s (PRU - Free Report) third-quarter 2020 operating net income of $3.21 per share beat the Zacks Consensus Estimate by 19.3%. However, the bottom line declined 0.3% year over year owing to lower contributions from U.S. Individual Solutions and Corporate and Other.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Total revenues of $13.3 billion increased 3.1% year over year due to higher premiums, net investment income, and increase in asset management fees, commissions and other income. However, the top line missed the Zacks Consensus Estimate by 3.5%.
Total benefits and expenses of $11.8 billion increased 9.1% year over year in the quarter. This increase in expenses was mainly due to higher insurance and annuity benefits, interest expense, and general and administrative expenses.
Quarterly Segment Update
Prudential Global Investment Management (PGIM) reported adjusted operating income of $370 million, which improved 59.5% year over year. The upside can be attributed to higher other related revenues, driven by an increase in co- and seed investment earnings, record high agency revenues, and higher incentive fees, as well as higher asset management fees, driven by an increase in average account values, partially offset by higher expenses.
PGIM assets under management improved 11% year over year to $1.443 trillion at the end of the reported quarter, driven by market appreciation and public fixed income inflows, partially offset by public equity outflows.
U.S. Workplace Solutions’ adjusted operating income was $394 million, which increased 0.5% from the year-ago quarter owing to higher contribution from Retirement and was offset by lower contribution by Group Insurance business.
U.S. Individual Solutions reported adjusted operating income of $509 million, down 1.7% mainly due to lower contribution from Individual Annuities, partly offset by higher contribution from Individual Life.
International delivered adjusted operating income of $775 million, up 7.5% from the year-earlier period, owing to lower expenses, business growth and more favorable underwriting results, partially offset by lower earnings from joint venture investments and lower net investment spread results.
Corporate and Other incurred adjusted operating loss of $455 million, wider than loss of $281 million reported a year ago. The deterioration reflects increased expenses, lower net investment income, higher interest expense on debt and lower income from pension and other employee benefit plans.
Financial Update
Cash and cash equivalents of $18.3 billion at quarter end increased 12% from 2019 end level.
Debt balance totaled $12.6 billion as of Sep 30, 2020, up 13.4% from the level as of 2019 end.
As of Sep 30, 2020, Prudential Financial’s assets under management increased 8.5% year over year to $1.6 trillion.
Adjusted book value per common share, a measure of the company’s net worth, came in at $94.36 as of Sep 30, 2020, down 5.3% year over year.
Operating return on average equity was 13.9% in the third quarter, up 110 basis points year over year.
Third-quarter earnings of CNA Financial (CNA - Free Report) , Assurant (AIZ - Free Report) and Athene Holding beat the respective Zacks Consensus Estimate.
Zacks’ Single Best Pick to Double
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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Prudential (PRU) Q3 Earnings Beat Estimates, Revenues Miss
Prudential Financial, Inc.’s (PRU - Free Report) third-quarter 2020 operating net income of $3.21 per share beat the Zacks Consensus Estimate by 19.3%. However, the bottom line declined 0.3% year over year owing to lower contributions from U.S. Individual Solutions and Corporate and Other.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Prudential Financial, Inc. price-consensus-eps-surprise-chart | Prudential Financial, Inc. Quote
Operational Update
Total revenues of $13.3 billion increased 3.1% year over year due to higher premiums, net investment income, and increase in asset management fees, commissions and other income. However, the top line missed the Zacks Consensus Estimate by 3.5%.
Total benefits and expenses of $11.8 billion increased 9.1% year over year in the quarter. This increase in expenses was mainly due to higher insurance and annuity benefits, interest expense, and general and administrative expenses.
Quarterly Segment Update
Prudential Global Investment Management (PGIM) reported adjusted operating income of $370 million, which improved 59.5% year over year. The upside can be attributed to higher other related revenues, driven by an increase in co- and seed investment earnings, record high agency revenues, and higher incentive fees, as well as higher asset management fees, driven by an increase in average account values, partially offset by higher expenses.
PGIM assets under management improved 11% year over year to $1.443 trillion at the end of the reported quarter, driven by market appreciation and public fixed income inflows, partially offset by public equity outflows.
U.S. Workplace Solutions’ adjusted operating income was $394 million, which increased 0.5% from the year-ago quarter owing to higher contribution from Retirement and was offset by lower contribution by Group Insurance business.
U.S. Individual Solutions reported adjusted operating income of $509 million, down 1.7% mainly due to lower contribution from Individual Annuities, partly offset by higher contribution from Individual Life.
International delivered adjusted operating income of $775 million, up 7.5% from the year-earlier period, owing to lower expenses, business growth and more favorable underwriting results, partially offset by lower earnings from joint venture investments and lower net investment spread results.
Corporate and Other incurred adjusted operating loss of $455 million, wider than loss of $281 million reported a year ago. The deterioration reflects increased expenses, lower net investment income, higher interest expense on debt and lower income from pension and other employee benefit plans.
Financial Update
Cash and cash equivalents of $18.3 billion at quarter end increased 12% from 2019 end level.
Debt balance totaled $12.6 billion as of Sep 30, 2020, up 13.4% from the level as of 2019 end.
As of Sep 30, 2020, Prudential Financial’s assets under management increased 8.5% year over year to $1.6 trillion.
Adjusted book value per common share, a measure of the company’s net worth, came in at $94.36 as of Sep 30, 2020, down 5.3% year over year.
Operating return on average equity was 13.9% in the third quarter, up 110 basis points year over year.
Zacks Rank & Performance of Other Insurers
Prudential currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Third-quarter earnings of CNA Financial (CNA - Free Report) , Assurant (AIZ - Free Report) and Athene Holding beat the respective Zacks Consensus Estimate.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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