What's In Store For Prudential Financial (PRU) Q1 Earnings?
Zacks Investment Research | Apr 29, 2018 11:33PM ET
Prudential Financial, Inc. (NYSE:PRU) is slated to report first-quarter 2018 results on May 2 after the market closes. In fourth-quarter 2017, the company delivered a positive earnings surprise of 3.46%.
Let’s see, how things are shaping up for this announcement.
Prudential Financial is expected to have witnessed bottom-line growth in the soon-to-be-reported quarter owing to recurring premium sales, expanded product offerings and broader distribution capabilities.
The Zacks Consensus Estimate is pegged at $2.99 per share, reflecting a year-over-year increase of 7.2%. To top it all, share buyback might have boosted the bottom-line upside.
With respect to the lower tax rate, the company estimates its 2018 effective tax rate on adjusted operating income at about 22% to its U.S. business earnings. The tax reduction is anticipated to favorably impact the company’s bottom line and drive margin expansion.
The Zacks Consensus Estimate is pegged at $2.99 per share, reflecting a year-over-year increase of 7.2%. Share buyback might have boosted the bottom-line upside.
The company expects better-than-expected core performance of its businesses in the yet-to-be-reported quarter, mainly fueled by higher fees in its Annuities and Investment Management segments and sustained business growth in International Insurance.
Moreover, the company might experience positive results at its Total U.S. Individual Solutions owing to higher contribution from Individual Annuities. The Zacks Consensus Estimate for pre-tax operating profit is pegged at $492 million, representing a 5.1% increase year over year.
Prudential’s Retirement segment is likely to benefit from the company’s penetration and leadership in the pension risk transfer (PRT) business.
Prudential Financial is projected to benefit from a gradually improving interest rate environment, favoring investment income from higher invested asset balances.
The company is likely to report top-line growth in the first quarter, mainly driven by the probable increase in investment income, asset management fees plus commissions and other income. The Zacks Consensus Estimate for the metric is pegged at $13.7 billion, reflecting a 3.3% rise on a year-over-year basis.
Growing Asset Under Management (AUM) has likely resulted in higher asset management fees in the yet-to-be-reported quarter.
However, increase in expenses, mainly due to higher insurance and annuity benefits plus general and administrative expenses, is likely to have weighed on the desired margin expansion.
Prudential Financial, Inc. Price and EPS Surprise
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