Prudential 2Q net income rises 48 percent on investment gains, improved revenue

Prudential 2Q net income jumps 48 percent

DES MOINES, Iowa — Life insurer Prudential Financial Inc. said its second-quarter earnings surged 48 percent as revenue jumped and the company posted investment gains rather than last year’s losses.

Newark, N.J.-based Prudential said net income rose to $798 million, or $1.70 per share, compared with $538 million, or $1.25 per share a year ago. Adjusted earnings, excluding investment gains and losses and other charges, totaled $1.51 per share, compared with $1.87 per share a year ago.

Revenue climbed 39 percent to $8.74 billion.

The results easily topped the average estimates of analysts surveyed by Thomson Reuters, who had expected earnings of $1.32 per share on revenue of $7.28 billion.

Prudential said its investment gains reflect the increased market value of derivatives, and hedging programs driven by changes in interest rates. Insurers are sensitive to falling interest rates, in part, because that often makes it difficult for them to pay higher rates guaranteed in insurance contracts such as annuities and universal life policies sold prior to the declines in interest rates.