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Prudential (PRU) to Report Q1 Earnings: What's in Store?
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Prudential Financial, Inc. (PRU - Free Report) is slated to report first-quarter 2020 results on May 5, after market close. The company delivered a positive earnings surprise in the last reported quarter.
Factors to Consider
Prudential’s first-quarter performance is likely to have benefited from growth in asset-based businesses, improved margins in Group Insurance business, solid international operations and deeper reach in the pension risk transfer market.
The retirement business is expected to have benefited from a solid pension risk transfer pipeline.
Focus on growth markets likely has aided the performance at International Businesses. PGIM results are expected to reflect solid assets under management and higher net asset management fees.
Solid operations in Retirement, Group Insurance and Assurance IQ are expected to have driven earnings growth and returns at U.S. Businesses. However, low interest rates and net outflows in Individual Annuities business may have been a drag.
Revenues are expected to have been boosted by an increase in recurring premium sales, expanded product offerings, broader distribution capabilities, policy charges as well as fee income. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $14.8 billion, which implies an increase of 8.1% from the figure reported in the year-ago quarter.
However, expenses are likely to have increased due to higher interest credited to policyholders' account balances, interest expense, amortization of acquisition costs, and general and administrative expenses. This might have caused margin contraction.
Lower interest rate is likely to have weighed on reinvestment rates, inducing lower net investment income.
Continued share buybacks might have provided additional upside to the bottom line.
The Zacks Consensus Estimate for earnings per share is pegged at $2.84, down 5.3% from the year-ago quarter’s reported figure.
Our proven model does not conclusively predict an earnings beat for Prudential this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case as you can see below.
Earnings ESP: Prudential has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate as well as Most Accurate Estimate in pegged at $2.84. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Prudential currently carries a Zacks Rank #3.
Stocks to Consider
Some other stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:
Unum Group (UNM - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank of 3. The company is set to report first-quarter results on May 4.
Assurant (AIZ - Free Report) has an Earnings ESP of +4.28% and a Zacks Rank of 3. The company is set to report first-quarter results on May 5.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Prudential (PRU) to Report Q1 Earnings: What's in Store?
Prudential Financial, Inc. (PRU - Free Report) is slated to report first-quarter 2020 results on May 5, after market close. The company delivered a positive earnings surprise in the last reported quarter.
Factors to Consider
Prudential’s first-quarter performance is likely to have benefited from growth in asset-based businesses, improved margins in Group Insurance business, solid international operations and deeper reach in the pension risk transfer market.
The retirement business is expected to have benefited from a solid pension risk transfer pipeline.
Focus on growth markets likely has aided the performance at International Businesses. PGIM results are expected to reflect solid assets under management and higher net asset management fees.
Solid operations in Retirement, Group Insurance and Assurance IQ are expected to have driven earnings growth and returns at U.S. Businesses. However, low interest rates and net outflows in Individual Annuities business may have been a drag.
Revenues are expected to have been boosted by an increase in recurring premium sales, expanded product offerings, broader distribution capabilities, policy charges as well as fee income. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $14.8 billion, which implies an increase of 8.1% from the figure reported in the year-ago quarter.
However, expenses are likely to have increased due to higher interest credited to policyholders' account balances, interest expense, amortization of acquisition costs, and general and administrative expenses. This might have caused margin contraction.
Lower interest rate is likely to have weighed on reinvestment rates, inducing lower net investment income.
Continued share buybacks might have provided additional upside to the bottom line.
The Zacks Consensus Estimate for earnings per share is pegged at $2.84, down 5.3% from the year-ago quarter’s reported figure.
Prudential Financial, Inc. Price and EPS Surprise
Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Prudential this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case as you can see below.
Earnings ESP: Prudential has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate as well as Most Accurate Estimate in pegged at $2.84. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Prudential currently carries a Zacks Rank #3.
Stocks to Consider
Some other stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:
American International (AIG - Free Report) has an Earnings ESP of +1.60% and a Zacks Rank of 3. The company is set to report first-quarter results on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.
Unum Group (UNM - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank of 3. The company is set to report first-quarter results on May 4.
Assurant (AIZ - Free Report) has an Earnings ESP of +4.28% and a Zacks Rank of 3. The company is set to report first-quarter results on May 5.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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