Prudential Loses Nearly $1 Billion On Charges

By Associated Press

May 03, 2012 at 05:52 AM

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NEWARK, N.J. (AP)—Prudential Financial, Inc. swung to a loss of nearly $1 billion in the first quarter as it wrote down the value of derivatives, and operating results fell short of expectations.

After rising 6 cents to close at $60.94 in regular trading, the shares dropped after the report. They fell $3.38, or 5.6 percent, to $57.56 in after-hours trading.

The big life insurance company reported a net loss of $988 million, or $2.09 per share, compared with income of $539 million, or $1.10 per share, a year earlier.

That included net pretax charges of about $1.5 billion because derivatives lost value after the Japanese yen weakened against the dollar and other currencies.

The company said its operating income, excluding the derivatives losses and other items, was $1.56 per share.

Analysts expected an adjusted profit of $1.72 per share, according to FactSet.

Revenue rose 16 percent to $10.65 billion from $9.15 billion a year ago. That beat the forecast of analysts, who expected $10.48 billion.

Prudential said its net loss reflected fluctuations in claims, expenses and investments but that fundamentals of its business remained solid. The company said its U.S. businesses hit records for annuity and retirement account values and assets under management.

Prudential reported its first-quarter loss on the same day that home and auto insurer Allstate Corp. reported a profit of $766 million, a 46 percent increase from a year earlier.

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