(Bloomberg) -- Prudential Financial Inc.'s third-quarter profit surpassed expectations, fueled by gains in its workplace-solutions business.
- The employer-focused segment posted a 32% gain in adjusted operating income of $392 million in the third quarter, helped by higher investment spreads in its retirement business and favorable underwriting in its group insurance division.
Key Insights
- Assets for PGIM, Prudential's investment-management unit, rose 9% from a year earlier to $1.284 trillion, driven by appreciation in fixed income markets, which were partially offset by equity outflows.
- “We are making progress in driving greater efficiency and speed within our operations,” Chief Executive Officer Charles Lowrey said in a statement. “Looking ahead, we are focused on meeting the evolving needs of our customers, while continuing to take a disciplined approach to pricing.”
- The individual life and international insurance segments came under pressure, with operating income falling 65% and 11%, respectively.
Market Reaction
- Prudential shares advanced 1.7% to $94.50 Monday in New York and have gained 16% this year.
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- After-tax adjusted operating income rose to $3.22 a share, beating the $3.06 median estimate of analysts surveyed by Bloomberg. Net income decreased to $1.42 billion, exceeding the $1.23 billion average estimate.
- Prudential agreed to buy startup Assurance IQ Inc., a distribution platform, for $2.35 billion in September, as it seeks to use data analytics to match customers with life, health, Medicare and auto coverage.
- “Seems like a decent quarter,” credit analyst David Havens at Imperial Capital wrote in a note, citing the insurer's ability to withstand interest-rate pressures and improve efficiency.
- Prudential's statement is here.
To contact the reporter on this story: Lananh Nguyen in New York at lnguyen35@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Steve Dickson
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