Prudential Announces Strong Q2 Results

Financial Services Businesses income up, driven by retirement, asset management segments

Prudential Financial Inc. released second quarter results Wednesday, reporting net income of $798 million for its Financial Services Businesses, up from $538 million in the second quarter of last year.

Adjusted operating income for the U.S. Retirement Solutions and Investment Management division fell slightly from $564 million to $552 million.

The individual annuities segment reported adjusted operating income of $286 million, down from $432 million a year ago. Those results include $196 million to support guaranteed minimum death and income benefits, and $88 million which represents an "increase in amortization of deferred policy acquisition and other costs."

The retirement segment reported an increased income of $142 million compared with $99 million a year ago. Higher fees as a result of increased account values attributed to the segment's increase, as well as "a greater contribution from investment results," according to the company.

The asset management segment likewise reported increased earnings with $124 million, compared with just $33 million a year ago. Results were driven by increased management fees as assets under management grew. Commercial mortgage and proprietary investing activities also attributed to the results.

The individual life segment showed a decrease in operating income, reporting $88 million down from $138 million one year ago. The decrease, according to the company, is a result of net amortization of deferred policy acquisition costs.

The group insurance segment also posted a drop in income, with results of $32 million compared with $105 million a year ago. Several factors contributed to this drop, including less favorable underwriting results, less favorable group disability claims experience, and higher expenses.

Chairman and Chief Executive Officer John Strangfeld expressed confidence in the businesses' overall performance. "Our businesses performed well in the second quarter, and our results for the first half are on track toward our objectives for the year," he said in a press release. "We continue to see benefits from our enhanced competitive position in sales and net asset flows, and we are focused on growing distribution in our U.S. and international markets and building quality business that can provide appropriate returns over market cycles.

"We are positioned to benefit from changes in the landscape that favor strong companies with solid value propositions, and I have never been more confident in our long-term prospects," he added.

The International Insurance and Investments division reported adjusted operating income of $478 million for the second quarter, up slightly from $476 million one year ago. New policy valuation systems and improved results from global commodities drove results for these segments.

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