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Prudential Gains Most Since 2011, Leading Insurer Rally

Pedestrians pass the headquarters building of Prudential Financial Inc. in Newark, New Jersey. Photographer: Emile Wamsteker/Bloomberg
Pedestrians pass the headquarters building of Prudential Financial Inc. in Newark, New Jersey. Photographer: Emile Wamsteker/Bloomberg

May 2 (Bloomberg) -- Prudential Financial Inc., the second-largest U.S. life insurer, gained the most since 2011 as profit beat estimates, fueled by results outside the U.S.

The insurer jumped $4.39, or 7.4 percent, to $63.67 at 10:31 a.m. in New York. The shares have advanced about 19 percent since Dec. 31.

Operating profit was $2.28 per share, beating by about 42 cents the average estimate of analysts surveyed by Bloomberg. The Newark, New Jersey-based insurer benefited from stronger results at its international business, which focuses on Asia, and from its deal to acquire Hartford Financial Services Group Inc.’s individual life insurance operations, Prudential said in a statement yesterday.

“This may have been Prudential’s best quarter ever, and we are affirming our top pick rating,” Eric Berg, an analyst at RBC Capital Markets, wrote in a research note today. “Prudential’s rapidly expanding Japan business, representing half of the company’s earnings, is providing ballast to the company’s earnings growth.”

In the international unit, operating income jumped 47 percent to $877 million in the first quarter. The company benefited from lower costs tied to integrating units it bought from American International Group Inc. as well as business growth, according to the statement.

MetLife Inc., the largest U.S. life insurer, also gained after profit beat estimates. The shares climbed 2.7 percent to $39.43.

Operating profit at New York-based MetLife was $1.48 a share, exceeding the $1.30 average estimate of analysts surveyed by Bloomberg. Operating earnings rose 11 percent in Asia, MetLife said yesterday in a statement.

The KBW Insurance Index gained 0.7 percent, as 16 of its 24 companies advanced. Lincoln National Corp., the Radnor, Pennsylvania-based insurer, tumbled 3.7 percent after operating profit missed the average estimate of analysts. Claims costs from life insurance were higher than expected, according to a statement yesterday.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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