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Why Is Prudential Financial (PRU) Up 2.4% Since the Last Earnings Report?

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It has been about a month since the last earnings report for Prudential Financial, Inc. (PRU - Free Report) . Shares have added about 2.4% in that time frame, underperforming the market.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 catalysts.

Prudential Financial Q4 Earnings Beat, Improve Y/Y

Prudential Financial, Inc. reported fourth-quarter 2016 operating income of $2.46 per share that beat the Zacks Consensus Estimate by 6.5%. Earnings also improved 26.8% year over year.

Including the impact of one-time items, net income was $0.65 per share, down 59.4% year over year.

Total revenue inched up 1.3% year over year to $13.4 billion due to 0.9% growth in policy charges and fee income, 11.3% increase in net investment income, and 1.9% rise in asset management fees, commissions and other income.

Total benefits and expenses of $11.9 billion decreased approximately 0.8% year over year in the quarter. The decrease in expenses is mainly attributable to lower insurance and annuity benefits and interest expenses.

Full-Year Highlights

Prudential Financial’s adjusted operating income for 2016 came in at $9.13 per share, down 9.1% year over year.

Total revenues climbed 6.1% year over year to $51.6 billion.

Quarterly Segment Update

U.S. Retirement Solutions and Investment Management reported adjusted operating income of $964 million, up 24.2% 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 $181 million, up 43.7% from the prior-year quarter. Higher contribution from Individual Life led to the upside.

International Insurance reported adjusted operating income of $755 million, up 2.3% year over year. The upside was due to higher contribution from Life Planner operations.

Corporate and Other Operations reported adjusted operating loss of $441 million, narrower than a loss of $458 million in the year-ago quarter.

As of Dec 31, 2016, Prudential Financial’s assets under management increased 6.8% to $1.264 trillion from $1.184 trillion as of Dec 31, 2015. Book value, a measure of the company’s net worth, increased 9.6% to $71.62 per share as of Dec 31, 2016, from $65.32 per share as of Dec 31, 2015.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.

VGM Scores

At this time, Prudential Financial's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with an 'A'. Following the exact same course, the stock was allocated also a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the stock is suitable for value and momentum investors.

Outlook

Estimates have been broadly trending upward for the stock. The magnitude of these revisions also looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.


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