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Prudential (PRU) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

Prudential Financial PRU is slated to report third-quarter 2019 results on Nov 4, after market close. The company delivered a negative earnings surprise in the two reported quarters of 2019.

Factors to Consider

Prudential’s third-quarter results are likely to benefit from growth in asset-based businesses, improved margins in Group Insurance business, solid international operations and deeper reach in the pension risk transfer market.

The retirement business is expected have benefited from a solid pension risk transfer pipeline.

Growing Japan business, leadership position in Japan life insurance market and businesses in Brazil, Chile, Indonesia, India, China and Africa are likely to have aided the International Insurance segment.

U.S. Financial Wellness is likely to have benefited from advice, investment, and retirement income and protection solutions, thus aiding full-service retirement plan sales and Group Insurance sales.

Revenues are likely to have been boosted by increase in recurring premium sales, expanded product offerings, broader distribution capabilities, policy charges as well as fee income. The Zacks Consensus Estimate for revenues is pegged at $14.3 billion.

However, expenses are likely to have increased attributable to higher policyholders’ benefits, amortization of deferred policy acquisition costs as well as general and administrative expenses. This might have weighed on operating margin.

Lower interest rate is likely to have weighed on spread income and reinvestment rates.

Nonetheless, lower share count owing to buybacks is likely to have provided a boost to the bottom line. The Zacks Consensus Estimate for earnings per share is pegged at $3.17, indicating 0.6% increase from the year-ago period reported figure.

Prudential Financial, Inc. Price and EPS Surprise

Prudential Financial, Inc. Price and EPS Surprise

Prudential Financial, Inc. price-eps-surprise | Prudential Financial, Inc. Quote

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Prudential this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case as you can see below.

Earnings ESP: Prudential has an Earnings ESP of -2.38%. This is because the Most Accurate Estimate of $3.10 is pegged lower than the Zacks Consensus Estimate of $3.17. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Prudential currently carries a Zacks Rank #3.    

Stocks to Consider

Some stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Goosehead Insurance GSHD is set to report third-quarter earnings on Nov 1. It has an Earnings ESP of +8.00% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hallmark Financial Services HALL is set to report third-quarter earnings on Nov 7. It has an Earnings ESP of +3.03% and a Zacks Rank of 2.

NMI Holdings NMIH is set to report third-quarter earnings on Nov 6. It has an Earnings ESP of +1.23 and a Zacks Rank of 3.

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Prudential Financial, Inc. (PRU) : Free Stock Analysis Report
 
Hallmark Financial Services, Inc. (HALL) : Free Stock Analysis Report
 
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Goosehead Insurance Inc. (GSHD) : Free Stock Analysis Report
 
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