Prudential Financial, Inc. PRU reported first-quarter 2025 adjusted operating income of $3.29 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line rose 7.8% year over year.
Total revenues of $13.4 billion declined 38% year over year and missed the Zacks Consensus Estimate by 7.7%. The decrease in revenues was due to lower premiums and asset management fees, commissions and other income. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Prudential Financial's quarterly results reflected higher asset management fees, favorable underwriting results, improved assets under management and lower expenses. It was offset by lower net investment spread results.
Prudential Financial, Inc. Price, Consensus and EPS Surprise
Prudential Financial, Inc. price-consensus-eps-surprise-chart | Prudential Financial, Inc. Quote
Operational Update
Total benefits and expenses amounted to $18.9 billion, which declined 41% year over year in the first quarter. This increase was due to lower insurance and annuity benefits, interest expense and operating expenses. The figure was higher than our estimate of $13 billion.
Quarterly Segment Update of PRU
Prudential Global Investment Management’s (PGIM) adjusted operating income of $156 million decreased 7.6% year over year. The metric missed the Zacks Consensus Estimate by 22%. Our estimate was $222.6 million. This decrease primarily reflects lower other related revenues, due to a decline in seed and co-investment income and lower incentive fees. It was partially offset by higher asset management fees, net of related expenses.
PGIM’s assets under management of $1.522 trillion in the reported quarter increased 1.7% year over year.
The U.S. Businesses delivered an adjusted operating income of $931 million, which grew 15.6% year over year. The metric missed the Zacks Consensus Estimate by 3.1%. Our estimate was $953.3 million. This increase primarily reflects more favorable underwriting results and lower expenses. It was partially offset by lower fee income, net of distribution expenses and other associated costs from the run-off of legacy traditional variable annuity block, and lower net investment spread results, driven by lower alternative investment returns.
International Businesses’ adjusted operating income declined 5.3% year over year to $848 million in the first quarter. The metric was higher than our estimate of $785.1 million. This decrease primarily reflects lower net investment spread results, lower joint venture earnings, and a net unfavorable impact from foreign currency exchange rates.
Corporate and Other incurred an adjusted operating loss of $415 million, narrower than the loss of $435 million reported a year ago. This narrower loss primarily reflects lower expenses, partially offset by higher interest expense. The figure was narrower than the Zacks Consensus Estimate of a loss of $453 million and wider than our estimate of a loss of $409 million.
Capital Deployment of PRU
Prudential Financial managed to return capital to its shareholders in the form of share repurchases worth $250 million and dividends worth $486 million in the first quarter.
PRU’s Financial Update
PRU exited the first quarter with cash and cash equivalents of $16.1 billion, which decreased 14.3% from the end of 2024.
Total debt balance of $20.9 billion increased 5% from 2024-end.
As of March 31, 2025, Prudential Financial’s assets under management and administration rose 1.4% year over year to $1.7 trillion.
Adjusted book value per common share, a measure of the company’s net worth, came in at $96.37, which decreased 0.6% year over year.
Operating return on average equity was 13.8% in the first quarter, which expanded 110 basis points year over year.
Zacks Rank
Prudential Financial currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Arch Capital Group Ltd. ACGL reported first-quarter 2025 operating income of $1.54 per share, which beat the Zacks Consensus Estimate by 12.4%. The bottom line, however, declined 37.1% year over year. Gross premiums written improved 8.9% year over year to $6.4 billion. Net premiums written climbed 10.5% year over year to $4.5 billion on higher premiums written across its Insurance and Reinsurance segments.
Net investment income grew 15.6% year over year to $378 million and beat our estimate of $436.2 million. The Zacks Consensus Estimate was pegged at $415 million. Operating revenues of $4.5 billion rose 21.2% year over year, driven by higher net premiums earned and net investment income. It missed the Zacks Consensus Estimate by 0.9%.
Cincinnati Financial Corporation CINF reported first-quarter 2025 operating loss of 24 cents per share, narrower than the Zacks Consensus Estimate of a loss of 61 cents. CINF had reported an operating income of $1.72 per share in the prior-year quarter. The year-over-year decrease of $309 million was primarily due to a $356 million increase in after-tax catastrophe losses.
Total operating revenues in the quarter under review were $2.6 billion, which missed the Zacks Consensus Estimate by 2.5%. The top line, however, improved 13.3% year over year. Net written premiums climbed 11% year over year to $2.5 billion. Investment income, net of expenses, increased 14% year over year to $280 million, as bond interest grew 24% and stock portfolio dividends declined 7%. The figure was higher than our estimate of $274.8 million.
AXIS Capital Holdings Limited AXS posted first-quarter 2025 operating income of $3.17 per share, beating the Zacks Consensus Estimate by 20%. The bottom line increased 23.3% year over year. Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 5.9%. The top line, however, rose 8.2% year over year on higher net premiums earned and net investment income.
Net investment income jumped 24% year over year to $208 million. Our estimate was $193.8 million. Total expenses in the quarter under review rose 11.3% year over year to $1.3 billion, attributable to higher net losses and loss expenses and acquisition costs. Our estimate was $1.3 billion.
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