Prudential Financial Earnings: Here’s Why Investors are Bidding Down Shares

Prudential Financial, Inc. (NYSE:PRU) had a loss and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 1.5%.

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Prudential Financial, Inc. Earnings Cheat Sheet

Results: Net loss was $232 million (Operating profit, which excludes the results of policies sold before the firm went public and some investments, was $1.69.) in the quarter versus a net gain of $686 million in the year-earlier quarter.

Revenue: Rose 292.58% to $45.91 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Prudential Financial, Inc. reported adjusted net income of $1.69 per share. By that measure, the company missed the mean analyst estimate of $1.74. It beat the average revenue estimate of $12.86 billion.

Quoting Management: “We are pleased with the progress we’ve made over the past year toward achievement of our longer term objectives. We are continuing to benefit from strong business momentum, with a growing base of quality business driven by solid sales and flows. We surpassed significant milestones during the year, including $1 trillion of assets under management, over $400 billion of account values in our Retirement and Annuities businesses, and annualized new business premiums of over $4 billion in International Insurance. We’ve strengthened our U.S. businesses with the completion of two major ground breaking pension risk transfer transactions in the fourth quarter, building a leadership position in an attractive market well suited to our proficiencies. These transactions speak to our capabilities, our culture of multi-discipline collaboration, and our financial strength. Our acquisition of The Hartford’s individual life insurance business, which was completed early this year, is also expected to provide financial and strategic benefits. Our International Insurance business continues to perform well, with results benefiting from growth in multiple distribution channels and our achievement of cost synergies consistent with our goals through the successful integration of the acquired Star and Edison businesses. Our unique business mix, the quality of the businesses that make up that mix, and the talent of our people support our prospects for achievement of strong returns consistent with our targets as well as continued growth,” said Chairman and Chief Executive Officer John Strangfeld.

Key Stats (on next page)…

Revenue increased 249.3% from $13.14 billion in the previous quarter. Net loss decreased 62.46% from $618 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.85 to a profit $1.87. For the current year, the average estimate has moved down from a profit of $6.33 to a profit of $6.15 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)