U.S. News

Prudential Tops Forecasts as Assets Under Management Grow


Prudential Financial, the second largest U.S. life insurer, its first-quarter earnings rose more han 50% from a year ago, helped by growth in assets under management and retail brokerage.

Prudential , with over $2 trillion of life insurance in force worldwide, said net earnings were $1.03 billion or $2.18 a share, up from $675 million or $1.38 a share in the year-ago quarter when they were reduced by lower investment gains and obligations from its joint venture with Wachovia.

Newark, N.J.-based Prudential said operating earnings, which analysts use to measure performance because it excludes investments, were $868 million or $1.85 a share.

Analysts on average had expected Prudential to earn $1.65 a share on that basis, according to Reuters Estimates.

In the year-ago first quarter, Prudential earned $669 million or $1.36 a share from operations.

Analysts are expecting the life insurer to perform well in 2007 after Prudential raised its earnings estimate for 2007 twice in only a little over a month at the start of the year.

Its forecast for full-year earnings is $6.80 to $7.00 a share.

Prudential, which ranks second only to MetLife among U.S. life insurers, has estimated a return on equity, a key measure for insurers, of 15% to 17% during the next three years. Its return on equity in 2006 was 14.6%.