Prudential Financial, Inc.’s PRU third-quarter 2017 operating income of $3.01 per share beat the Zacks Consensus Estimate of $2.71 by 11.1%. The bottom line also improved about 13.2% year over year.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Prudential Financial, Inc. Price, Consensus and EPS Surprise | Prudential Financial, Inc. Quote
Including the impact of one-time items, net income was $5.09 per share, up 25.1% year over year.
Behind the Headlines
Total revenues climbed 10.2% year over year to $13.4 billion on the back of 0.4% growth in policy charges and fee income, 1.6% increase in net investment income and a 5.9% rise in asset management fees, commissions and other income. Also, the top line beat the Zacks Consensus Estimate by 9.2%.
Total benefits and expenses of $11.6 billion declined 14.2% year over year in the quarter. This decrease in expenses is mainly attributable to lower insurance and annuity benefits, interest credited to policyholders’ account balances and general and administrative expenses, respectively.
As of Sep 30, 2017, Prudential Financial’s assets under management increased 8.1% to $1.366 trillion from $1.264 trillion as of Dec 31, 2016. Adjusted book value, a measure of the company’s net worth, was $84.65 per share as of Sep 30, 2017, up 6.4% year over year.
Operating return on average equity was 14.8% compared with 13.8% in the year-ago quarter.
Debt balance totaled $19.5 billion as of Sep 30, 2017, down from $19.7 billion as of Sep 30, 2016.
Quarterly Segment Update
U.S. Retirement Solutions and Investment Management reported adjusted operating income of $1.1 billion, up 6.5% year over year. This upside was driven by higher contribution from Retirement and Asset Management businesses.
U.S. Individual Life and Group Insurance incurred adjusted operating income of $211 million, up nearly 22% from the year-ago quarter, attributable to higher contribution from Individual Life.
International Insurance reported adjusted operating income of $799 million, up 2.4% year over year. This improvement was owing to higher contribution from Gibraltar Life and Other operations.
Corporate and Other Operations reported adjusted operating loss of $310 million, narrower than a loss of $413 million in the year-ago quarter.
Zacks Rank
Currently, Prudential Financial holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other firms from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corporation PGR, The Travelers Companies, Inc. TRV and RLI Corp. RLI surpassed the respective Zacks Consensus Estimate.
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