Prudential's Japan Profit Falls To $559 Million As Sales Suspension Bites
Lower Japan earnings outweighed gains at PGIM and in U.S. units, pulling third-quarter adjusted operating income down to $1.321 billion.
Prudential Financial, the insurer and asset manager, said Tuesday that its Japan Businesses earned $559 million before taxes in the third quarter, down from $750 million a year earlier, as the sales suspension at Prudential of Japan cut deeply into results. That drag pulled after-tax adjusted operating income to $1.321 billion, or $3.77 per share, from $1.444 billion, or $4.05, in the year-ago quarter, according to an 8-K filing.
Japan drags, PGIM and annuities climb
The company said the lower Japan earnings more than offset solid fundamentals at PGIM and in its U.S. businesses. The Japan decline reflects higher expenses, less favorable underwriting results and lower net investment spread results tied to the suspension.
Constant-dollar sales in Japan were $291 million, down 36% from a year earlier, mainly because of the suspension.
PGIM, the investment management arm, earned $263 million before taxes, up from $244 million, helped by lower expenses and higher asset management fees. It took in $9.0 billion of third-party net inflows, partly offset by $1.6 billion of affiliated outflows, for total net inflows of $7.4 billion.
U.S. Businesses earned $1.173 billion, against $1.188 billion a year earlier. Retirement earned $620 million, down from $637 million, though retail annuity sales hit $3.9 billion on record sales of registered index-linked annuities. Individual Life rose to $199 million from $153 million, and Group Insurance to $101 million from $90 million.
Net income slips to $1.388 billion
Net income attributable to Prudential was $1.388 billion, or $3.96 per share, compared with $1.431 billion, or $4.01 per share, a year earlier. Corporate & Other posted an adjusted loss of $349 million, essentially unchanged from $353 million.
Prudential, which sells life insurance, annuities and retirement products and runs PGIM, had assets under management of $1.616 trillion, versus $1.612 trillion a year earlier. Book value per share fell to $84.88 from $90.69, while adjusted book value per share rose to $102.39 from $99.25.
$741 million back to shareholders
The company returned $741 million to shareholders in the quarter, made up of $250 million of buybacks and $491 million of dividends, versus $731 million a year earlier. Parent-company highly liquid assets were $4.0 billion.
Chairman and CEO Andy Sullivan said the company took a step toward narrowing its geographic footprint, announcing sales of Prudential of Brazil, Prudential of Mexico and its South Africa insurance business, and closing sales of its Indonesia and Kenya businesses. He said the Japan suspension "remained a headwind."
Management hosts an earnings call Wednesday at 11:00 a.m. ET to walk through the results.
Sources
- 8-K Filing — PRUDENTIAL FINANCIAL INC (PRU) — SEC EDGAR
- Exhibit exhibit991-3q26earningspre.htm — PRUDENTIAL FINANCIAL INC 8-K exhibit — SEC EDGAR
- Exhibit exhibit992-3q26qfs.htm — PRUDENTIAL FINANCIAL INC 8-K exhibit — SEC EDGAR
