Prudential Financial (PRU) Tops Q2 EPS by 14c

Prudential Financial (NYSE: PRU) reported Q2 EPS of $1.85, $0.14 better than the analyst estimate of $1.71.

• Net loss attributable to Prudential Financial, Inc. of $2.409 billion or $6.12 per Common share versus net income of $708 million or $1.71 per share for the year-ago quarter. The current quarter included a net after-tax charge from our annual reviews and update of assumptions and other refinements of $84 million or $0.21 per Common share versus $32 million or $0.08 per share in the year-ago quarter.
• After-tax adjusted operating income of $742 million or $1.85 per Common share versus $1.262 billion or $3.03 per share for the year-ago quarter(1). The current quarter included a net after-tax charge from our annual reviews and update of assumptions and other refinements of $266 million or $0.66 per Common share versus $36 million or $0.09 per share in the year-ago quarter.
• The current quarter charge from our annual reviews and update of assumptions and other refinements was primarily driven by the reduction in our long-term expectation of the 10-year U.S. Treasury rate by 50 basis points to 3.25%, and the reduction in the expected 10-year Japanese Government Bond yield by 30 basis points to 1.00%.
• Book value per Common share of $165.53 versus $150.04 per share for the year-ago; adjusted book value per Common share of $92.07 versus $97.15 per share for the year-ago.
• Parent company highly liquid assets of $4.5 billion versus $4.9 billion for the year-ago.
• Assets under management amounted to $1.605 trillion versus $1.497 trillion for the year-ago.

Charles Lowrey, Chairman and CEO, commented on results:

“During the second quarter, we displayed resiliency amidst the effects of the pandemic and economic and market shocks while continuing to execute against our 2020 priorities with urgency, benefiting from our complementary business mix, our rock-solid balance sheet, and our carefully constructed risk profile. We remain on track to achieve our targeted $140 million of cost savings for the year and are making progress in transitioning our international earnings base to higher-growth markets.

We also continue to address the impact of the low interest rate environment through aggressive repricing and by pivoting to less rate-sensitive products. We are examining ways to further reduce the sensitivity to interest rates and exploring the potential to generate cost savings on top of our existing 2022 target of $500 million.

Our hearts go out to all of those directly impacted by the COVID-19 pandemic and by the deeply troubling recent incidents of racial injustice and inequality. Guided by our purpose, we remain committed to addressing these challenges on behalf of our employees, customers and communities with compassion and accountability towards achieving meaningful outcomes.”

For earnings history and earnings-related data on Prudential Financial (PRU) click here.

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