LONDON (dpa-AFX) - Life insurer Prudential Financial Inc. (PRU), Wednesday reported a surge in second quarter profit on hefty derivative and currency gains owing to a strong Japanese yen. Excluding items, operating earnings for the quarter slid from last year as increased annuity and other expenses at U.S. businesses offset growth in revenues.
For the second quarter, net income of Financial Services Businesses to Prudential Financial sharply increased to $2.2 billion or $4.64 per share from $779 million or $1.58 per share last year.
Results for the 2012 quarter include foreign currency gains of $1.9 billion.
Excluding items, operating earnings for the quarter were $627 million or $1.34 per share, compared to $773 million or $1.57 per share last year.
On average, 19 analysts polled by Thomson Reuters expected earnings of $1.55 per share for the quarter. Analysts' estimates typically exclude one-time items.
Quarterly revenues at Financial Services Business increased to $11.4 billion from $10.01 billion last year.
Eight Wall Street analysts estimated revenues of $10.63 billion for the quarter.
Total premiums grew to $6.8 billion from $5.5 billion last year, while net investment income slightly improved to $2.56 billion.
Nonetheless, revenue growth was offset by expenses that escalated to $10.6 billion from $9 billion, on higher annuity and other costs.
Prudential Financial's Financial Services Businesses consist of U.S. Retirement Solutions and Investment Management; U.S. Individual Life and Group Insurance; and International Insurance divisions.
During the quarter, U.S. Retirement Solutions and Investment Management division's adjusted operating income slid to $302 million from $605 million, and U.S. Individual Life and Group Insurance dropped to $107 million from $184 million.
Meanwhile, the International Insurance division's adjusted operating income increased to $681 million from $500 million last year.
Prudential's assets under management totaled $661 billion as at June 30, 2012, compared to $883 billion in the prior year.
During the second quarter, Prudential acquired 4.8 million shares of its common stock for $250 million. Last month, its Board authorized further repurchases of up to $1.0 billion of its outstanding shares through June 30, 2013.
Among others in the industry, MetLife Inc. (MET) today said its quarterly profit more than doubled on derivative gains and growth in international businesses. Its profit jumped to $2.26 billion or $2.12 a share from $1.1 billion or $1.00 per share a year earlier.
PRU closed Wednesday at $47.58, down 1.45%, on a volume of 2.3 million shares on the NYSE. In after hours, the stock gained 0.36%. In the past year, the stock has traded in a range of $42.45 - $65.17.
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