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Prudential (PRU) Up 0.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Prudential (PRU - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Prudential due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Prudential Financial, Inc. reported fourth-quarter 2023 adjusted operating income of $2.58 per share, which missed the Zacks Consensus Estimate by 3.3%. However, the bottom line rose 3.6% year over year. Total revenues of $13 billion increased 6.7% year over year. The increase in revenues was due to higher premiums and net investment income. However, it missed the Zacks Consensus Estimate by 0.3%
Prudential's fourth-quarter results reflect improved expenses, less favorable underwriting results, net outflows, lower incentive fees and agency income, partially offset by higher asset management fees.
Operational Update
Total benefits and expenses amounted to $11.7 billion, which increased 7.2% year over year in the fourth quarter. This improvement was due to higher insurance and annuity benefits, interest credited to policyholders' account balances, amortization of acquisition costs, general and administrative expenses. The figure was higher than our estimate of $11.4 billion.
Quarterly Segment Update
Prudential Global Investment Management’s (PGIM) adjusted operating income of $172 million in the reported quarter decreased 25.2% year over year. This decrease primarily reflects higher expenses and lower other related revenues, mainly due to lower incentive fees and agency income, partially offset by improved asset management fees. The figure was lower than our estimate of $200.6 million.
PGIM’s assets under management of $1.298 trillion increased 6% year over year. The increase was due to equity market appreciation, partially offset by net outflows.
The U.S. Businesses delivered an adjusted operating income of $988 million, which increased 39.1% year over year. The figure was higher than our estimate of $512.4 million. This increase primarily reflects higher net investment spread results and lower expenses, partially offset by lower net fee income.
International Businesses’ adjusted operating income decreased 8.1% year over year to $748 million in the fourth quarter. This decrease primarily reflects less favorable underwriting results, including unfavorable policyholder behavior, partially offset by lower expenses.
Corporate and Other incurred an adjusted operating loss of $656 million, wider than a loss of $525 million reported a year ago. This higher loss primarily reflects improved expenses, driven by a $200 million restructuring charge in the current quarter.
Capital Deployment
Prudential managed to return capital to its shareholders in the form of share repurchases worth $250 million and dividends worth $458 million in the fourth quarter.
Financial Update
PRU exited the fourth quarter with cash and cash equivalents of $19.4 billion, which increased 12.5% from 2022-end. Total debt balance of $19.5 billion decreased 5.7% from 2022-end.
As of Dec 31, 2023, Prudential’s assets under management and administration increased 6.3% year over year to $1.63 trillion.
Adjusted book value per common share, a measure of the company’s net worth, was $96.64, which increased 2% year over year. Operating return on average equity was 10.9% in the fourth quarter, which improved 40 basis points year over year.
Full-Year Update
For 2023, the adjusted operating income of Prudential was $11.62 per share. The bottom line increased 12.7% from the 2022 figure. The bottom line missed the Zacks Consensus Estimate by 12.8%. Revenues for the year totaled $50.9 billion, which decreased 15% from the 2022 level. The top line missed the Zacks Consensus Estimate by 6%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Prudential has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, 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.
Outlook
Prudential has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Prudential belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, MetLife (MET - Free Report) , has gained 6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
MetLife reported revenues of $18.72 billion in the last reported quarter, representing a year-over-year change of +18.2%. EPS of $1.93 for the same period compares with $1.55 a year ago.
MetLife is expected to post earnings of $2.05 per share for the current quarter, representing a year-over-year change of +34.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for MetLife. Also, the stock has a VGM Score of B.
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Prudential (PRU) Up 0.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Prudential (PRU - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Prudential due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Prudential’s Q4 Earnings Miss, Revenues Increase Y/Y
Prudential Financial, Inc. reported fourth-quarter 2023 adjusted operating income of $2.58 per share, which missed the Zacks Consensus Estimate by 3.3%. However, the bottom line rose 3.6% year over year. Total revenues of $13 billion increased 6.7% year over year. The increase in revenues was due to higher premiums and net investment income. However, it missed the Zacks Consensus Estimate by 0.3%
Prudential's fourth-quarter results reflect improved expenses, less favorable underwriting results, net outflows, lower incentive fees and agency income, partially offset by higher asset management fees.
Operational Update
Total benefits and expenses amounted to $11.7 billion, which increased 7.2% year over year in the fourth quarter. This improvement was due to higher insurance and annuity benefits, interest credited to policyholders' account balances, amortization of acquisition costs, general and administrative expenses. The figure was higher than our estimate of $11.4 billion.
Quarterly Segment Update
Prudential Global Investment Management’s (PGIM) adjusted operating income of $172 million in the reported quarter decreased 25.2% year over year. This decrease primarily reflects higher expenses and lower other related revenues, mainly due to lower incentive fees and agency income, partially offset by improved asset management fees. The figure was lower than our estimate of $200.6 million.
PGIM’s assets under management of $1.298 trillion increased 6% year over year. The increase was due to equity market appreciation, partially offset by net outflows.
The U.S. Businesses delivered an adjusted operating income of $988 million, which increased 39.1% year over year. The figure was higher than our estimate of $512.4 million. This increase primarily reflects higher net investment spread results and lower expenses, partially offset by lower net fee income.
International Businesses’ adjusted operating income decreased 8.1% year over year to $748 million in the fourth quarter. This decrease primarily reflects less favorable underwriting results, including unfavorable policyholder behavior, partially offset by lower expenses.
Corporate and Other incurred an adjusted operating loss of $656 million, wider than a loss of $525 million reported a year ago. This higher loss primarily reflects improved expenses, driven by a $200 million restructuring charge in the current quarter.
Capital Deployment
Prudential managed to return capital to its shareholders in the form of share repurchases worth $250 million and dividends worth $458 million in the fourth quarter.
Financial Update
PRU exited the fourth quarter with cash and cash equivalents of $19.4 billion, which increased 12.5% from 2022-end. Total debt balance of $19.5 billion decreased 5.7% from 2022-end.
As of Dec 31, 2023, Prudential’s assets under management and administration increased 6.3% year over year to $1.63 trillion.
Adjusted book value per common share, a measure of the company’s net worth, was $96.64, which increased 2% year over year. Operating return on average equity was 10.9% in the fourth quarter, which improved 40 basis points year over year.
Full-Year Update
For 2023, the adjusted operating income of Prudential was $11.62 per share. The bottom line increased 12.7% from the 2022 figure. The bottom line missed the Zacks Consensus Estimate by 12.8%. Revenues for the year totaled $50.9 billion, which decreased 15% from the 2022 level. The top line missed the Zacks Consensus Estimate by 6%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Prudential has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, 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.
Outlook
Prudential has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Prudential belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, MetLife (MET - Free Report) , has gained 6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
MetLife reported revenues of $18.72 billion in the last reported quarter, representing a year-over-year change of +18.2%. EPS of $1.93 for the same period compares with $1.55 a year ago.
MetLife is expected to post earnings of $2.05 per share for the current quarter, representing a year-over-year change of +34.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for MetLife. Also, the stock has a VGM Score of B.