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Prudential Financial sees lower YOY operating income in Q1

Prudential FinancialInc. reported first-quarter after-tax adjusted operating income of $997million, or $2.18 per share, versus $1.30 billion, or $2.79 per share, in the prior-yearquarter.

The most recent quarter saw a pretax charge of $53 million inindividual annuities, representing the impact of market performance on deferredpolicy acquisition and other costs and reserves for guaranteed death and incomebenefits. The charge unfavorably impacted earnings by 8 cents per share. Prudentialrecorded a net favorable impact of 14 cents per share to operating income in thefirst quarter of 2015 related to the individual annuities segment.

The S&P Capital IQ consensus normalized EPS estimate forthe quarter was $2.36.

Net income attributable to the company in the period was $1.34billion, or $2.93 per share, compared with $2.04 billion, or $4.37 per share, inthe year-ago period. Net income for the recent quarter includes $338 million ofpretax net realized investment gains and related charges and adjustments; the sameline item a year earlier was more than $1 billion.

Net income for the recent quarter also reflects pretax increasesof $216 million in recorded asset values and $130 million in recorded liabilitiesrepresenting changes in value that are expected to ultimately accrue to contractholders. Pretax losses of $42 million from divested businesses primarily reflectresults of the closed block division.

Prudential's U.S. retirement solutions and investment managementdivision reported adjusted operating income of $712 million for the quarter, downfrom $1.02 billion a year ago. The U.S. individual life and group insurance divisionposted adjusted operating income of $146 million, remaining flat year over year,while the international insurance segment saw adjusted operating income of $779million, versus $834 million a year ago.

The corporate and other operations saw a loss of $312 millionon an adjusted operating income basis, compared with a loss of $253 million in theprior-year quarter.