Prudential Financial, Inc. Announces Third Quarter 2019 Results

Δευτέρα, 04 Νοεμβρίου 2019 16:34
Prudential Financial, Inc. Announces Third Quarter 2019 Results

- Net income attributable to Prudential Financial, Inc. of $1.418 billion or $3.44 per Common share versus $1.672 billion or $3.90 per share for the year-ago quarter.

- After-tax adjusted operating income of $1.329 billion or $3.22 per Common share versus $1.346 billion or $3.15 per share for the year-ago quarter.

- Book value per Common share of $163.19 versus $110.78 per share for the year-ago quarter; adjusted book value per Common share of $99.67 versus $95.20 per share for the year-ago quarter.

- Capital returned to shareholders of $1.4 billion in the quarter versus $0.8 billion for the year-ago quarter, including dividends of $1.00 per Common share, representing a 4% yield on adjusted book value.

- Parent company highly liquid assets of $6.2 billion versus $5.2 billion for the year-ago quarter.

- Assets under management amounted to $1.519 trillion versus $1.410 trillion for the year-ago quarter.

Charles Lowrey, Chairman and CEO, commented on results:

“During the third quarter, we continued to advance our strategy of delivering financial opportunity to a wider demographic, and the recent acquisition of Assurance IQ expands our distribution capabilities with a direct-to-consumer platform. At the same time, we are making progress in driving greater efficiency and speed within our operations, and we are on track to achieve $50 million in run-rate margin expansion by the end of 2019 and $500 million by the end of 2022. Looking ahead, we are focused on meeting the evolving needs of our customers, while continuing to take a disciplined approach to pricing in consideration of the effects on profitability from the low interest rate environment.”

Prudential Financial, Inc. (NYSE:PRU) reported third quarter results. Net income attributable to Prudential Financial, Inc. was $1.418 billion ($3.44 per Common share) for the third quarter of 2019, compared to $1.672 billion ($3.90 per Common share) for the third quarter of 2018. After-tax adjusted operating income was $1.329 billion ($3.22 per Common share) for the third quarter of 2019, compared to $1.346 billion ($3.15 per Common share) for the third quarter of 2018.Consolidated adjusted operating income, adjusted book value, and adjusted operating return on equity are non-GAAP measures. These measures are discussed later in this press release under “Forward-Looking Statements and Non-GAAP Measures” and reconciliations to the most comparable GAAP measures are provided in the tables that accompany this release.

RESULTS OF ONGOING OPERATIONS

The Company’s ongoing operations include PGIM, U.S. Financial Wellness including U.S. Workplace Solutions and U.S. Individual Solutions Divisions, International Insurance, and Corporate & Other Operations. In the following segment-level discussion, adjusted operating income refers to pre-tax results.

PGIM

PGIM, the Company’s global investment management business, reported adjusted operating income of $232 million in the current quarter, compared to $230 million in the year-ago quarter. The increase reflects higher asset management fees, from an increase in average assets under management, and higher other related revenues, largely offset by higher expenses.
PGIM assets under management of $1.284 trillion were up 9% from the year-ago quarter, reflecting fixed income market appreciation and inflows partially offset by equity outflows.

U.S. Financial Wellness

U.S. Workplace Solutions, consisting of the Retirement and Group Insurance segments, reported adjusted operating income of $392 million for the third quarter of 2019, compared to $298 million in the year-ago quarter.

Retirement Segment:

Reported adjusted operating income of $302 million in the current quarter, compared to $239 million in the year-ago quarter. The increase reflects higher net investment spread results, higher reserve gains, and higher fee income.
Account values of $478 billion were up 7% from the year-ago quarter including record high account values in Institutional Investment Products driven by pension risk transfer transactions. Net outflows in the current quarter totaled $2.7 billion with $3.3 billion from Full Service, partially offset by $0.6 billion of net inflows from Institutional Investment Products.

Group Insurance Segment:

Reported adjusted operating income of $90 million in the current quarter, compared to $59 million in the year-ago quarter. The increase reflects more favorable underwriting results and lower expenses.
Reported earned premiums, policy charges, and fees of $1.3 billion in the current quarter were consistent with the year-ago quarter.
U.S. Individual Solutions, consisting of the Individual Annuities and Individual Life segments, reported adjusted operating income of $518 million for the third quarter of 2019, compared to $624 million in the year-ago quarter.

Individual Annuities Segment:

Reported adjusted operating income of $459 million in the current quarter, compared to $454 million in the year-ago quarter. The year-ago quarter included an unfavorable impact from changes in market conditions on estimates of profitability. Excluding this item, the decrease primarily reflects lower net fees, partially offset by higher net investment spread results.
Account values of $165 billion were down 1% from the year-ago quarter, reflecting net outflows, partially offset by market appreciation over the year. Gross sales of $2.7 billion in the current quarter reflect our continued diversification strategy with 61% of sales coming from less equity market sensitive products.

Individual Life Segment:

Reported adjusted operating income of $59 million in the current quarter, compared to $170 million in the year-ago quarter. The decrease primarily reflects less favorable underwriting results and higher expenses, partially offset by higher net investment spread results.
Sales of $175 million in the current quarter were up 7% from the year-ago quarter, primarily reflecting higher variable life sales.

International Insurance

International Insurance, consisting of Life Planner Operations and Gibraltar Life & Other Operations, reported adjusted operating income of $791 million for the third quarter of 2019, compared to $890 million in the year-ago quarter.

Life Planner Operations:

Reported adjusted operating income of $367 million in the current quarter, compared to $449 million in the year-ago quarter. The decrease primarily reflects higher than typical net expenses, partially offset by business growth.
Constant dollar basis sales of $323 million in the current quarter were up 8% from the year-ago quarter, driven by our Brazil operations.

Gibraltar Life & Other Operations:

Reported adjusted operating income of $424 million in the current quarter, compared to $441 million in the year-ago quarter. The decrease primarily reflects higher expenses, partially offset by business growth and higher earnings from joint venture investments.
Constant dollar basis sales of $314 million in the current quarter were down 11% from the year-ago quarter, primarily reflecting lower U.S. dollar-denominated fixed annuity sales in the Life Consultant channel.

Corporate & Other Operations

Corporate & Other Operations reported a loss, on an adjusted operating income basis, of $281 million in the third quarter of 2019, compared to a loss of $374 million in the year-ago quarter. The lower loss from the year-ago quarter reflects lower expenses, including for employee benefit and compensation plans tied to Company stock and equity market performance, and higher net investment income, partially offset by higher interest expense.

NET INCOME AND INVESTMENT PORTFOLIO

Net income attributable to Prudential Financial, Inc. amounted to $1.418 billion for the third quarter of 2019, compared to $1.672 billion for the year-ago quarter.
Current quarter net income included:
$290 million of pre-tax net realized investment gains and related charges and adjustments, including $99 million of credit loss impairments
$314 million of pre-tax losses related to market experience updates
Net income for the year-ago quarter included:
$177 million of pre-tax net realized investment gains and related charges and adjustments, including $25 million from impairments and sales of credit-impaired investments

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