Why Is Prudential (PRU) Down 3% Since Last Earnings Report?

Core Viewpoint - Prudential Financial's recent earnings report showed mixed results, with adjusted operating income missing estimates but showing year-over-year growth. The company is facing a downward trend in estimates, leading to questions about its future performance leading up to the next earnings release [1][2][15]. Financial Performance - Adjusted operating income for Q4 2024 was $2.96 per share, missing the Zacks Consensus Estimate by 9.7%, but increased by 16.5% year over year [2]. - Total revenues reached $13 billion, a 1% increase year over year, but fell short of the Zacks Consensus Estimate by 8% [3]. - Total benefits and expenses were $11.6 billion, a slight decrease of 0.03% year over year, and also lower than the estimate of $13.2 billion [4]. Segment Performance - Prudential Global Investment Management (PGIM) reported adjusted operating income of $259 million, a 50.6% increase year over year, exceeding the estimate of $236.2 million [5]. - PGIM's assets under management grew to $1.375 trillion, a 6% increase year over year [6]. - The U.S. Businesses segment saw adjusted operating income decrease by 10.7% year over year to $860 million, missing the estimate of $1.1 billion [7]. - International Businesses reported adjusted operating income of $742 million, a decrease of 0.8% year over year, but higher than the estimate of $735.8 million [8]. - Corporate and Other incurred an adjusted operating loss of $490 million, an improvement from a loss of $653 million a year ago [9]. Capital Management - Prudential returned $720 million to shareholders through share repurchases of $250 million and dividends of $470 million in Q4 [10]. - The board authorized a share repurchase program of up to $1 billion and increased the quarterly cash dividend by 4% to $1.35 per share, marking the 17th consecutive year of dividend increases [11]. Financial Position - As of the end of Q4, cash and cash equivalents were $18.5 billion, down 4.7% from the end of 2023, while total debt increased by 3.2% to $20.1 billion [12]. - Assets under management and administration rose by 3.3% year over year to $1.69 trillion, with adjusted book value per common share at $95.82, a decrease of 0.8% year over year [13]. Full-Year Update - For 2024, adjusted operating income was $12.62 per share, a 6% increase from 2023, but missed the Zacks Consensus Estimate by 4.7%. Total revenues for the year were $68 billion, a 35% increase from 2023, but also missed estimates by 1.6% [14]. Market Outlook - Estimates for Prudential have been trending downward, indicating a potential shift in market sentiment. The company currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [17].