US insurer Prudential reports better-than-expected profit

(REUTERS) - Prudential Financial Inc, the second-largest US life insurer, reported a better-than-expected quarterly profit, helped by strength in its US retirement and investment management business.

Adjusted operating earnings in the US retirement solutions and investment management business rose 24.2 per cent to US$964 million (S$1,370 million) in the fourth quarter.

Prudential also reported a rise in operating earnings for all its major businesses.

"While we continue to face uncertainties and challenges in the macro environment, we remain confident in our long-term business outlook and ability to produce differentiated returns,"Chief Executive John Strangfeld said in a statement.

On an adjusted operating basis, Prudential earned US$2.46 per share, beating the average analyst estimate of US$2.32, according to Thomson Reuters I/B/E/S.

However, the company's net profit more than halved as it recorded US$824 million in investment losses and charges.

MetLife, the largest US life insurer, posted a quarterly loss last week, hurt by a US$3.2 billion derivative loss.

Prudential, like its peers, counts on its derivatives programme to smooth out risks stemming from volatile currency exchange rates, equities markets and interest rate changes.

Net profit attributable to the company fell to US$284 million, or 65 cents per share, in the quarter ended Dec 31, from US$735 million, or US$1.60 per share, a year earlier.

Prudential's shares, which have surged about 19 per cent since the US presidential election, were marginally down in extended trading on Wednesday.

Insurance stocks have been on a rally on expectations that profits will be boosted by President Donald Trump's plans to cut corporate taxes and ease regulatory restraints.