Business Strategy and Growth - The company aims to leverage a mutually-reinforcing business system to achieve higher growth and reduced market sensitivity [19]. - The company serves both institutional and individual retirement needs, focusing on innovative product design and risk management strategies [28]. - The company expanded into the medical stop loss market, with coverage effective from January 1, 2025 [33]. - The company competes in the pension risk transfer market, leveraging its expertise to provide innovative solutions [31]. - The company continues to explore opportunities to expand distribution capabilities through bank and independent agency channels [49]. - New product offerings and pricing adjustments are periodically made based on market conditions and strategic goals [41]. - The company has exited several businesses, including PGIM Wadhwani LLP and Assurance IQ, LLC, to streamline operations [56]. Investment Management - PGIM provides investment management services across various asset classes, including public fixed income, public equity, and private credit [22]. - Revenues are primarily derived from asset management fees, commercial mortgage origination, and transaction fees related to real estate and private fixed income [25]. - PGIM's investment management products compete based on performance, strategy, and client relationships [25]. Insurance Products and Revenue - The company offers a variety of group insurance products, including group life, disability, and supplemental health insurance, with revenues primarily derived from premiums and policy charges [36]. - The company develops and distributes individual life insurance products targeting mass middle, mass affluent, and affluent customers, focusing on estate and wealth transfer planning [39]. - Revenues are primarily derived from premiums, policy charges, and investment income, with a focus on appropriate pricing to maintain profitability [51]. - The profitability of retirement strategies is significantly influenced by the ability to appropriately price products based on market conditions [31]. - The profitability of products can fluctuate due to differences in actual mortality, morbidity, and investment experience compared to pricing assumptions [51]. Regulatory Environment - The company is subject to comprehensive regulations that may increase compliance costs and affect profitability due to changes in laws and regulations [78]. - The Financial Stability Oversight Council (FSOC) adopted revisions to the Systemically Important Financial Institution (SIFI) designation guidance in November 2023, making it easier to designate financial companies as SIFIs going forward [81]. - The Employee Retirement Income Security Act (ERISA) applies to U.S. employee benefit plans, and the company provides services to these plans, potentially acting as an ERISA fiduciary [83]. - The SEC's Regulation Best Interest, effective June 30, 2020, mandates that broker-dealers act in the best interest of retail customers, resulting in increased compliance costs for the company [88]. - The company is not currently designated as a SIFI, but future actions by the FSOC could impact its regulatory status [82]. - The company must comply with various state insurance laws that require regulatory approval for changes in control and financial reporting [92]. Market Conditions and Opportunities - The life insurance market in Japan is competitive, with opportunities for product innovation as the population ages [51]. - In Brazil, life insurance penetration is low, but the market is growing due to increased awareness of life insurance needs [51]. - The company adjusts product offerings and pricing based on market conditions to achieve customer and enterprise value [51]. Financial Performance and Risks - Investment income contributes to the net spread over interest credited on products, impacting overall profitability [36]. - Future profitability is influenced by assumptions regarding mortality, morbidity, policyholder behavior, and interest rates [41]. - The company is exposed to interest rate risk, which can lead to earnings compression and volatility in both earnings and capital due to mismatches in asset/liability durations [207][208][209]. - Prudential's foreign exchange risk arises from significant operations outside the U.S., particularly in Japan, which can adversely affect profitability and cash flows [211][212][213][214]. - The company is exposed to liquidity risk, which may arise from insufficient funding sources or immediate cash needs [219]. Operational and Cybersecurity Risks - Operational risks include potential losses from inadequate processes, human error, and external events, which may be elevated due to ongoing organizational changes [221]. - Cybersecurity risks are heightened due to increased cyber-attack activity, which could lead to financial losses, client service impacts, and reputational harm [230]. - The company faces risks related to the integrity and confidentiality of personal information, which could be compromised through cybersecurity breaches [235]. - Significant costs may arise from cyber-attacks, including reputational damage and regulatory penalties, which could harm the company's financial condition [236]. Taxation and Compliance - The U.S. statutory federal income tax rate is currently 21%, and any future increase could adversely impact the company's tax position [142]. - The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21% and introduced the Global Intangible Low-Taxed Income (GILTI) provision, which imposes a U.S. tax rate on foreign subsidiary earnings [143]. - The GILTI provision will increase the U.S. tax rate to 62.5% on foreign earnings starting in 2026, affecting the company's tax liabilities [144]. - The Base Erosion Anti-Abuse Tax (BEAT) could increase the company's tax expense if deductible payments to foreign affiliates exceed 3% of total U.S. tax deductions, with rates increasing from 10% to 12.5% by 2026 [146]. Employee and Workforce Management - As of December 31, 2024, the total employee population is 38,196, with 14,087 in the U.S. and 24,109 in non-U.S. regions [161]. - The annual turnover rate among the U.S. workforce in 2024 was 15.3%, with voluntary turnover at 4.7% [167]. - The company filled approximately 1,900 positions in the U.S. in 2024, with 37% of those positions filled internally [167]. - The company conducts a global employee engagement survey, with 89% of eligible global employees responding in 2024 [166]. Distribution and Sales Practices - The company faces regulatory and competitive risks due to reliance on captive and third-party distributors for product sales [238]. - Recent revisions to rules regarding sales practices and customer advice have increased scrutiny on the company's distribution methods [239]. - Investigations into marketing practices of brokers and agents have led to enforcement actions against the company and its industry peers [239]. - Inappropriate distribution of products or misconduct by distributors could harm the company's reputation and lead to regulatory penalties [239].

Core Insights - Prudential reported $13.01 billion in revenue for Q4 2024, a year-over-year increase of 1.1%, but fell short of the Zacks Consensus Estimate of $14.15 billion by 8.08% [1] - The company's EPS for the quarter was $2.96, compared to $2.54 a year ago, but also missed the consensus estimate of $3.28 by 9.76% [1] Financial Performance Metrics - Assets Under Management and Administration (PGIM) totaled $1,375.2 billion, below the average estimate of $1,418.1 billion [4] - Institutional customer assets were reported at $620.2 billion, compared to the average estimate of $646.74 billion [4] - Retail customer assets stood at $370.9 billion, slightly above the average estimate of $368.64 billion [4] - General account assets were $384.1 billion, below the average estimate of $401.62 billion [4] - Total revenues from International Businesses were $4.28 billion, below the average estimate of $4.36 billion, representing a year-over-year decline of 2.2% [4] - U.S. Businesses generated $7.58 billion in revenue, compared to the estimated $8.61 billion, reflecting a year-over-year increase of 1.4% [4] - Adjusted Operating Income from policy charges and fee income was $1.06 billion, below the average estimate of $1.16 billion [4] - Premiums generated adjusted operating income of $5.94 billion, compared to the estimated $7.04 billion [4] - Net investment income was reported at $4.60 billion, slightly above the average estimate of $4.47 billion [4] - Total revenues from International Businesses' Life Planner segment were $2.19 billion, slightly above the average estimate of $2.16 billion, with a year-over-year decline of 2% [4] - Total revenues from U.S. Businesses' Retirement Strategies segment were $4.48 billion, below the average estimate of $5.38 billion, representing a year-over-year increase of 3.3% [4] Stock Performance - Prudential's shares returned +0.2% over the past month, while the Zacks S&P 500 composite increased by +1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Prudential's quarterly earnings of $2.96 per share fell short of the Zacks Consensus Estimate of $3.28 per share, marking a -9.76% earnings surprise, despite an increase from $2.54 per share a year ago [1][2] Financial Performance - The company reported revenues of $13.01 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 8.08%, with no year-over-year revenue growth [2] - Over the last four quarters, Prudential has surpassed consensus EPS estimates only once, while it has topped consensus revenue estimates three times [2] Stock Performance and Outlook - Prudential shares have increased by approximately 0.3% since the beginning of the year, underperforming compared to the S&P 500's gain of 1.9% [3] - The company's earnings outlook is mixed, with current consensus EPS estimates of $3.50 for the coming quarter and $14.44 for the current fiscal year, alongside revenues of $14.17 billion and $58.43 billion respectively [7] Industry Context - The Insurance - Multi line industry, to which Prudential belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - The pretax adjusted operating income for Q4 2024 was $1.4 billion, or $2.96 per share, while the full year was $5.9 billion, or $12.62 per share, reflecting a 6% increase from 2023 [20] - The GAAP net loss for the quarter was $57 million, primarily due to interest rate-driven realized losses on the investment portfolio [20] - The adjusted operating return on equity improved by 70 basis points to 13.1% from 2023 [21] Business Line Data and Key Metrics Changes - PGIM reported higher asset management fees driven by strong net flows and market appreciation, with assets under management increasing by 6% to $1.4 trillion [24] - Retirement strategies generated strong sales of $50 billion in 2024, with pension risk transfer transactions exceeding $16 billion, the highest annual level since 2012 [28][29] - Individual life sales reached a record high of $326 million in Q4, up 60% year-over-year, contributing to a 23% increase for the full year [32][36] Market Data and Key Metrics Changes - International business sales increased by 6% in 2024, with Japan benefiting from new retirement and savings product launches, resulting in a 14% increase in sales [34] - Emerging market sales grew by 12%, driven by growth in Brazil [34] Company Strategy and Development Direction - The company aims to become a higher growth, more capital-efficient entity, with a disciplined approach to capital deployment and a focus on organic growth opportunities [10][41] - The introduction of new financial targets through 2027 includes an expected annual core earnings per share growth of 5% to 8% and an adjusted return on equity of 13% to 15% [39] - The company is exploring opportunities for inorganic growth while maintaining a disciplined capital deployment strategy [42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term headwinds due to new business strain and runoff but expressed confidence in achieving the 5% to 8% EPS growth target over the next three years [88] - The company remains optimistic about the pension risk transfer market despite recent litigation affecting the industry, citing strong funded statuses and favorable market conditions [82][83] Other Important Information - The company returned nearly $3 billion to shareholders in 2024 and authorized share repurchases of up to $1 billion in 2025 [15][16] - The board increased the common stock dividend for the 17th consecutive year [16] Q&A Session Summary Question: Annuity outlook and sales growth expectations - Management noted strong annuity sales, with RILA sales up over 35% across the industry, and Prudential delivered $3.5 billion in sales in Q4, marking the ninth consecutive quarter of sales growth [50][51] Question: Prismic's potential for third-party deals - Management expressed optimism about Prismic's growth opportunities in Japan, highlighting the market's potential and the establishment of a dedicated team [56][59] Question: Free cash flow conversion and capital allocation - Management clarified that 30% to 40% of free cash flow is targeted for growth capital, with a focus on balancing financial strength and returning capital to shareholders [64][70] Question: Impact of recent lawsuits on transaction pipeline - Management indicated that while litigation poses risks to the pension risk transfer industry, they remain confident in the active pipeline and strong market conditions [82][83] Question: Expectations for 2025 EPS growth - Management reiterated confidence in the 5% to 8% EPS growth target, acknowledging that growth may not be linear due to near-term headwinds [88] Question: Future transactions with Prismic in Japan - Management confirmed ongoing work on multiple reinsurance transactions in Japan, indicating a significant market opportunity [91] Question: Insights on ESR implementation and capital levels - Management expects to maintain capital levels above target upon ESR implementation, with no significant changes anticipated in capital position [97][98] Question: Drivers of PGIM earnings growth - Management outlined expectations for margin improvement driven by an improving market environment, growth investments, and expense discipline [126]

4Q24 EARNINGS CALL FEBRUARY 5, 2025 Expanding access to investing, insurance, and retirement security Becoming a higher growth, more capital efficient company Maintaining disciplined capital deployment Supported by our rock solid balance sheet WE MAKE LIVES BETTER BY SOLVING THE FINANCIAL CHALLENGES OF OUR CHANGING WORLD 2 KEY MESSAGES BECOMING A HIGHER GROWTH, MORE CAPITAL EFFICIENT COMPANY SIGNIFICANT 2024 PROGRESS POSITIONS US WELL FOR THE FUTURE Growing our market leading businesses Increasing capital f ...

Core Viewpoint - Prudential's quarterly earnings of $2.96 per share fell short of the Zacks Consensus Estimate of $3.28 per share, marking a -9.76% earnings surprise, despite an increase from $2.58 per share a year ago [1][2] Financial Performance - The company reported revenues of $13.01 billion for the quarter, missing the Zacks Consensus Estimate by 8.08%, and showing a slight decrease from $13.02 billion year-over-year [2] - Over the last four quarters, Prudential has surpassed consensus EPS estimates only once, while it has topped consensus revenue estimates three times [2] Stock Performance and Outlook - Prudential shares have increased by approximately 0.3% since the beginning of the year, underperforming compared to the S&P 500's gain of 1.9% [3] - The company's earnings outlook is mixed, with current consensus EPS estimates at $3.50 for the upcoming quarter and $14.44 for the current fiscal year, alongside revenues of $14.17 billion and $58.43 billion respectively [7] Industry Context - The Insurance - Multi line industry, to which Prudential belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Adjusted operating income before income taxes for PGIM increased by 14% year-over-year to $241 million in Q3 2024[9]. - U.S. Businesses reported a 3% increase in adjusted operating income before income taxes, reaching $1,040 million in Q3 2024[9]. - International Businesses experienced a 3% decrease in adjusted operating income before income taxes, totaling $766 million in Q3 2024[9]. - Total adjusted operating income before income taxes for Q3 2024 was $1,560 million, a 4% increase compared to the same quarter last year[9]. - After-tax adjusted operating income for Q3 2024 was $1,208 million, reflecting a 2% increase year-to-date[9]. - Net income attributable to Prudential Financial, Inc. for Q3 2024 was $448 million, a significant increase of 138% compared to the same quarter last year[9]. - Return on Average Equity based on net income for Q3 2024 was 6.1%, compared to 19.6% in Q4 2023[9]. - Dividends paid in Q3 2024 amounted to $471 million, a 2% increase year-to-date[9]. - Total revenues for Q3 2024 reached $19,489 million, a 46% increase compared to $13,849 million in Q2 2024[22]. - Total revenues for Q3 2024 were $4,417 million, a decrease of 5% compared to Q3 2023[67]. Revenue and Premiums - Premiums collected in Q3 2024 amounted to $12,527 million, reflecting an 85% increase from $7,277 million in Q2 2024[22]. - Total revenues for U.S. businesses in Q3 2024 were $13.98 billion, an 86% increase compared to $7.48 billion in Q4 2023[39]. - Premiums for U.S. businesses surged to $9.69 billion in Q3 2024, a 190% increase compared to $3.51 billion in Q4 2023[39]. - Total revenues for Individual Retirement Strategies reached $1,318 million in Q3 2024, marking a 12% increase from $1,157 million in Q3 2023[47]. - Total revenues for the Group Insurance segment in Q3 2024 were $1,643 million, a 3% increase compared to $1,586 million in Q2 2024[55]. Investment Income - Net investment income for Q3 2024 was $4,436 million, up 12% from $4,218 million in Q2 2024[22]. - Net investment income rose significantly by 43% year-over-year to $1,505 million in Q3 2024, compared to $1,055 million in Q3 2023[47]. - Total investment income for Q3 2024 was $4,436 million, a decrease of 13.5% from $3,892 million in Q3 2023[89]. - Net investment income for the nine months ended September 30, 2024, was $14,668 million, compared to $13,367 million for the same period in 2023, reflecting a 9.7% increase[105]. Assets and Liabilities - Total assets under management and administration increased to $1,747.7 billion in Q3 2024, compared to $1,665.9 billion in Q2 2024[20]. - Total assets increased to $760,294 million as of September 30, 2024, up from $721,123 million at the end of 2023, representing a growth of 5.4%[24]. - Total liabilities increased to $727,719 million, up from $691,336 million at the end of 2023, representing a rise of 5.3%[26]. - Total debt as of September 30, 2024, is $20,026 million, an increase from $19,500 million as of December 31, 2023, representing a growth of 2.7%[28]. Expenses - Total benefits and expenses for Q3 2024 were $17,929 million, a 52% increase from $12,289 million in Q2 2024[22]. - General and administrative expenses for Q3 2024 were $749 million, an 8% increase from $731 million in Q2 2024[31]. - General and administrative expenses for U.S. businesses were $1.34 billion in Q3 2024, reflecting a 15% increase from $1.34 billion in Q2 2024[39]. - General and administrative expenses for the nine months ended September 30, 2024, were $10,426 million, compared to $9,783 million in 2023, reflecting a rise of 6.6%[105]. Market and Product Development - The company is focusing on market expansion and new product development to drive future growth, although specific figures were not disclosed in the call[109]. - The company continues to focus on market expansion and new product development to enhance revenue streams[121]. Ratings and Stock Information - Prudential Financial, Inc. maintains strong credit ratings with long-term senior debt rated A by Standard & Poor's and Aa3 by Moody's[156]. - The Prudential Insurance Company of America holds an A+ rating from A.M. Best and AA rating from Fitch[156]. - Prudential Financial's common stock is traded on the New York Stock Exchange under the symbol PRU[157].

In its upcoming report, Prudential (PRU) is predicted by Wall Street analysts to post quarterly earnings of $3.28 per share, reflecting an increase of 27.1% compared to the same period last year. Revenues are forecasted to be $14.15 billion, representing a year-over-year increase of 8.7%.The consensus EPS estimate for the quarter has undergone a downward revision of 0.6% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initia ...

Core Viewpoint - Prudential Financial Inc. (PRU) is experiencing strong investor confidence, with its stock trading near a 52-week high and showing solid upward momentum, supported by positive growth projections and favorable analyst sentiment [1][4][5]. Group 1: Stock Performance and Market Position - PRU's shares have rallied 24.8% year to date, outperforming the Finance sector's return of 22.9%, but underperforming the industry's growth of 26% and the S&P 500's return of 26.7% [2]. - The company has a market capitalization of $46.1 billion, with an average trading volume of 1.48 million shares over the last three months [3]. Group 2: Growth Projections - The Zacks Consensus Estimate for PRU's 2024 earnings per share indicates a year-over-year increase of 14.8%, with revenues projected at $68.20 billion, implying a year-over-year improvement of 34% [4]. - For 2025, the consensus estimate for earnings per share indicates a year-over-year increase of 10% from the 2024 estimate [4]. Group 3: Analyst Sentiment - Six out of nine analysts covering PRU have raised their estimates for 2024, and four analysts have raised estimates for 2025 in the past 30 days, resulting in a 0.3% upward adjustment in the consensus estimates for both years [5]. Group 4: Financial Efficiency - PRU's Return on Invested Capital (ROIC) has been increasing, with a trailing 12-month ROIC of 0.9%, which is better than the industry average of 2.5% [6]. Group 5: Business Strengths - The company benefits from solid asset-based businesses, improved margins in Group Insurance, and international operations, with a high-performing asset management business and a strong position in the pension risk transfer market [7]. - PRU is among the top five individual life insurance companies in the U.S., holding leading positions in various life insurance products and expanding its retirement business [8]. Group 6: Market Expansion - The U.S. business segment is focused on enhancing customer experiences and expanding its addressable market with new financial solutions [9]. - PRU's strong international presence, particularly in Japan and Brazil, provides organic growth opportunities, with Brazil expected to contribute significantly to earnings growth in the coming years [10][11]. Group 7: Valuation - PRU's stock is currently undervalued compared to its industry, trading at a price-to-earnings multiple of 8.88, lower than the industry average of 9.63, and has an impressive Value Score of A [12]. Group 8: Conclusion - The combination of a growing presence in the pension risk transfer market, higher earnings from emerging markets, expanded distribution, and a solid financial position makes PRU a strong candidate for investment [13].

Financial Data and Key Metrics Changes - The company reported a pretax adjusted operating income of $1.6 billion or $3.48 per share for Q3 2024, with a year-to-date adjusted operating income of $9.98 per share, reflecting a 6% increase compared to the previous year [20][41] - Year-to-date adjusted operating return-on-equity improved by 0.5 percentage points to 13.7%, indicating stronger business performance and capital efficiency [21][49] Business Line Data and Key Metrics Changes - PGIM's assets under management increased by 15% to $1.4 trillion, driven by market appreciation and net flows, with total net flows of $3.2 billion in the quarter [26][27] - Retirement Strategies generated nearly $15 billion in sales during Q3, with institutional retirement sales totaling $11 billion, including a $6.3 billion pension risk transfer transaction with IBM [31][32] - Individual Retirement posted $3.6 billion in sales, marking its best quarter in over a decade, with strong performance from registered index-linked annuities and fixed annuity products [33][64] - Group Insurance sales increased by 3% year-to-date, driven by growth in supplemental health products [34] Market Data and Key Metrics Changes - Sales in international businesses rose by 25% year-over-year, with Japan's retirement and savings products sales up 30% compared to the prior year [39] - The company captured about 40% of the pension risk transfer market year-to-date [32] Company Strategy and Development Direction - The company is focused on becoming a higher-growth, more capital-efficient organization by diversifying product offerings and expanding global distribution networks [8][50] - Strategic partnerships, such as with JPMorgan Asset Management, are being pursued to enhance product offerings and market reach [12] - The company is investing in technology to improve sales, service, and claims experiences across its businesses [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and capabilities, highlighting a strong financial position with over $4 billion in highly liquid assets [17][49] - The company anticipates continued demand for retirement products in Japan and emerging markets, driven by demographic trends and evolving customer needs [60][39] Other Important Information - The company plans to introduce new intermediate-term financial targets to provide better insight into its financial outlook [48][91] - A disciplined approach to capital deployment was maintained, with over $700 million returned to shareholders during Q3 [17][56] Q&A Session Summary Question: Update on Prismic and capital usage - Management indicated a visible pipeline for reinsurance transactions, particularly in Japan, and emphasized a disciplined approach to capital redeployment [52][56] Question: Margins on retirement products in Japan - Management expressed confidence in the profitability of retirement product sales in Japan, expecting no negative impact on margins despite a shift in product mix [59][60] Question: Sales mix between yen and foreign currency products in Japan - The company reported that yen-based sales have nearly doubled over the last three years, contributing to a 29% year-over-year sales increase [66] Question: Impact of excess mortality on reserves - Management confirmed that their mortality assumptions reflect continued excess mortality through 2028, with a diversified mix of businesses providing natural hedges [70][71] Question: Institutional outflows and future expectations - Management noted variability in institutional fixed income flows but expects normalization as the rate curve stabilizes [75][78] Question: Reinsurance opportunities in Japan - Management highlighted the strategic importance of reinsurance for optimizing capital and mitigating risks associated with the new economic solvency regime [108][114]