Aug. 6 (Bloomberg) — Prudential Financial Inc., the No. 2 U.S. life insurer, posted net income of $1.09 billion in the first quarter driven by results at the U.S. unit.
The profit compares with a loss of $514 million a year earlier, Newark, New Jersey-based Prudential said today in a statement. Operating earnings, which exclude some investments and the results of policies sold before the firm went public, were $2.49 per share, beating the $2.35 average estimate of 19 analysts surveyed by Bloomberg.
Chief Executive Officer John Strangfeld, 60, is counting on pension-transfer deals and acquisitions to help Prudential maintain a return on equity of at least 13 percent to 14 percent. The deals add to funds that Prudential oversees at its asset-management operation, which has hired more than 40 managers since last year.
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Improvements in ROE were "driven by steady organic growth, accretion from recent M&A and pension closeout transactions, and ongoing share repurchases," Jimmy Bhullar, an analyst at JPMorgan Chase & Co., said in a research note, using the company's ticker symbol. "Our outlook for operating trends in PRU's major businesses is positive."
Prudential rose 1 percent to $86.57 at 4 p.m. in New York. The stock has declined 6.1 percent this year, compared with the 4.8 percent slump by larger rival MetLife Inc. Results were announced after the close of regular trading.
MetLife reported results last week that fell short of analysts' estimates as operating profit slumped at the group benefits business.
Prudential gets about half its profits from international units, mainly in Japan. The company expanded in the country in 2011 with the acquisition of insurers Star and Edison from American International Group Inc.
Prudential has struck deals to take on pension obligations from companies including General Motors Co. and Verizon Communications Inc. Visteon Corp. agreed last month to buy a group annuity contract from Prudential to cover about $350 million of the manufacturer's pension liabilities. U.K. phone-company BT Group bought longevity insurance from Prudential, according to a statement last month.
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