Prudential profit misses on asset management, international drop

(Bloomberg) –Prudential Financial Inc. reported profits that slightly missed analyst estimates as the insurer faced declines at its asset management and international divisions.  

The company, which also announced a new chief financial officer, posted earnings per share of $2.58, just short of analysts’ $2.61 predictions. Adjusted operating income at its PGIM investment-management business fell to $172 million from $230 million a year earlier, although assets under management at that unit just topped forecasts.

Still, the company reported $1.3 billion of net income for the quarter after posting a loss in the same period last year.

“Our 2023 results reflect continued strong sales across our insurance and retirement businesses and solid underlying earnings growth,” Chief Executive Officer Charlie Lowrey said in a Tuesday statement. “In 2023, we successfully reduced our market sensitivity and increased capital flexibility through multiple strategic transactions.”

Prudential has been engaged in a multi-year overhaul meant to transform the firm through deals, cost savings and share buybacks. Lowrey has overseen moves away from market-sensitive businesses, including part of a variable annuities block the company has sold. The life insurer last year cut jobs among senior leaders in an effort to bring down operating costs and eliminate “unnecessary complexity.” 

Yanela Frias, formerly president of group insurance for the company, will take over as CFO in March, succeeding Ken Tanji, according to the company. 

Shares of the Newark, New Jersey-based company were unchanged in extended New York trading.

Key Insights

Adjusted operating income for PGIM, the investment-management business, was $172 million, down from $230 million the year before. The company credited “higher expenses and lower other related revenues,” including lower incentive fees.Total assets under management at PGIM were $1.3 trillion, up 6% from a year earlier.Income in the international business segment fell to $748 million compared to $814 million the year prior due to “less favorable underwriting results.”Adjusted operating income for the company’s US businesses rose to $988 million from $710 million a year earlier, due to higher net investment spread results and a drop in expenses.