The life insurance and annuity company reported net income of $69 million compared with $1.12 billion a year earlier. The latest results included $940 million of investment losses, versus prior-year gains of $223 million, Investment Advice and include Prudential’s closed-block business. They are made up of life-insurance and annuity policies that it sold when it was a mutual company but which it no longer offers.
Earnings at Prudential’s financial-services business fell to $77 million, or 20 cents a share, from $1.03 billion, or $2.18 a share. Excluding investment gains and losses and other items, earnings fell to $1.65 a share from $1.83.
Financial-services revenue rose 4.9% to $6.98 billion.
Analysts’ mean estimates were for financial-services earnings of $1.82 a share on revenue of $6.63 billion, according to a poll by Thomson Reuters.
Chief Executive John R. Strangfeld Jr.Investment Advice said despite the investment losses, “we are confident that our strong balance sheet and diversified mix of domestic and international businesses position us well to manage through the challenging current environment.”
Net realized investment losses included $460 million in write-downs and sales of credit-impaired securities, including $290 million related to asset-backed securities collateralized by subprime mortgages.
At the end of the quarter, Prudential had gross unrealized losses on general account fixed maturity investments of $3.57 billion, including $3.14 billion on investment-grade securities. Gross unrealized losses included $1.15 billion related to asset-backed securities collateralized by subprime mortgages.
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