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Prudential Financial (PRU) Q2 Earnings: What's in the Cards?

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Prudential Financial, Inc. (PRU - Free Report) is slated to report second-quarter 2017 results on Aug 2 after the market closes. Last quarter, the company delivered a positive earnings surprise of 5.68%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Prudential’s second-quarter earnings results are expected to have improved, banking on the strength of expanded product offerings, global presence and broader distribution capabilities.

The top line is said to have likely improved on higher net investment income, increased improved asset management fees, commissions and other incomes.

Strong account value growth is expected to have favored the company’s performance in the U.S. Retirement Solutions and Investment Management segment.

Share buyback is also likely to have boosted the bottom line.

Additionally, increase in higher total benefits and expenses possibly have weighed on margin expansion.

With respect to the earnings trend, though the company delivered positive surprises in three of the last four quarters, it came up with an average negative surprise of 1.88%.

Earnings Whispers

Our proven model does not conclusively show that Prudential is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Prudential has an Earnings ESP of -0.37%. This is because the Most Accurate estimate is pegged lower at $2.69 while the Zacks Consensus Estimate stands at $2.70. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Prudential carries a Zacks Rank #3, which increases the predictive power of ESP. However, a negative ESP leaves our earnings surprise prediction inconclusive.

We caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some better-ranked companies from the finance sector that you may want to consider as these have the right combination of elements to come up with an earnings beat this quarter:

Cigna Corp. (CI - Free Report) , which is set to report second-quarter earnings on Aug 4, has an Earnings ESP of +1.61% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Navigators Group, Inc. (NAVG - Free Report) has an Earnings ESP of +5.17% and a Zacks Rank #3. The company is slated to report second-quarter earnings on Aug 3.

National General Holdings Corp. (NGHC - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #1. The partnership is set to report second-quarter earnings on Aug 7.

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