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Prudential: The Rock Slides

Shares of the insurance giant were knocked lower Thursday after it missed its earnings target and lowered its 2008 profit guidance

Investors got a bit of a shock from the Rock. Just two months ago, Prudential (PRU) had reaffirmed its 2007 profit forecast and issued guidance for 2008. But when the insurance giant released its financials after the close of trading on February 6, it announced shortfalls for both. Startled investors sold the company’s stock the following day. The shares fell by as much as 10% on Feb. 7 before closing at $71.39, down nearly 8%.

Prudential announced 2007 aftertax operating income of $3.4 billion, or $7.31 per share, compared to $2.9 billion, or $6.06 per share, in 2006, a 21% increase. However, the number was well below the company's guidance of $7.45-$7.60 per share. The Newark, N.J.-based company reduced its 2008 operating income guidance from $8.20-$8.40 to $7.70-$8.40.