Posted on 04 May 2012
Prudential Financial Inc.'s swung to a first-quarter loss as the insurer posted pretax charges of about $1.49 billion relating to currency fluctuations and derivative impacts -- mostly related to the Japanese yen's decline against the U.S. dollar.
Prudential's earnings have continued to climb over the past year, usually led by stronger results from its U.S. retirement and investment-management business.
In the latest quarter, earnings in the U.S. retirement segment reported adjusted operating earnings growth of 16%, while Prudential's individual-annuities business saw its profit rise 54%. The asset-management unit reported profit fell 21% amid lower contribution from the segment's incentive, transaction, strategic investing and commercial mortgage activities, as well as higher expenses.
Overall, Prudential's financial-services business reported a loss of $988 million, or $2.09 a share, compared with a year-earlier profit of $539 million, or $1.10 a share. The latest period included $1.84 billion of net realized investment losses and charges including the $1.49 billion currency related impact.
The most recent results included the impact of divested businesses and other special items. They excluded Prudential's closed block of business, representing life-insurance and annuity policies offered when Prudential was owned by its policyholders.
Adjusted operating income, which excludes one-time items and some investment results, fell to $1.56 a share from $1.62.
Total financial services revenue increased 16% to $10.65 billion. Analysts polled by Thomson Reuters most recently projected earnings of $1.71 a share on revenue of $10.48 billion.