Prudential Financial Inc. PRU reported second-quarter 2015 operating net earnings of $2.91 per share, beating the Zacks Consensus Estimate by 18.3% and increasing 16.7% on a year-over-year basis.
Strong results were driven by higher contribution from the company’s Retirement Solutions and Investment Management as well as U.S. Individual Life and Group Insurance segments. A lower share count on account of the company’s continuous share buyback also aided bottom-line growth.
Including favorable one-time items of 29 cents per share, net income came in at $3.03 per share in the quarter, up 36.5% year over year.
Total revenue increased 10.6% year over year to $12.5 billion primarily on higher premium and higher net investment income. The top line also surpassed the Zacks Consensus Estimate of $11.2 billion.
Total benefits and expenses were $10.7 billion in the quarter, 12.6% higher year over year. The increase was due to higher insurance and annuity benefits, and interest expenses.
Quarterly Segment Update
U.S. Retirement Solutions and Investment Management reported adjusted operating income of $981 million, up 12% year over year. The upside was driven by higher contribution from Individual Annuities, partly offset by lower contribution from the Retirement business and Asset Management.
Adjusted operating income at U.S. Individual Life and Group Insurance increased 53% year over year to $312 million led by higher contribution from the Individual Life and Group Insurance business.
Adjusted operating income at International Insurance decreased 4.8% year over year to $842 million. The decline stemmed from lower profits at Life Planner and Gibraltar Life and Other operations.
Corporate and Other Operations’ adjusted loss narrowed to $294 million from loss of $341 million recorded in the year-ago quarter due to lower expenses and higher investment income.
Prudential Financial’s assets under management increased 0.9% from the year-end 2014 level to $1.87 trillion as of Jun 30, 2015. Book value, a measure of the company’s net worth was $71.09 at Jun 30, 2015, up 9.8% from the Dec 31, 2014 level.
Share Repurchase Update
During the second quarter, Prudential spent $250 million on buying back 2.9 million shares, exhausting the $1 billion authorization. On Jun 9, the board approved another $1 billion buyback through Jun 2016. Since Jul 2011 through Jun 2015, the company bought back 58.9 million shares for $3.9 billion.
Performance of Other Multi-Line Insurers
The bottom line at Assurant Inc. AIZ, Cigna Corp. CI and The Hartford Financial Services Group, Inc. HIG surpassed their respective Zacks Consensus Estimate in the second quarter.
Zacks Rank
Prudential carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment