Prudential Leads Life Insurers Higher After Beating Estimates

By Andrew Frye
Bloomberg News
May 7, 2009

May 7 (Bloomberg) -- Prudential Financial Inc. gained the most in five months, leading life insurers higher, after first- quarter operating profit beat analysts' estimates.

Prudential, the second-biggest U.S. life insurer, rose $5.47, or 15 percent, to $41.04 at 9:48 a.m. in New York Stock Exchange composite trading. The company earned $1.05 a share, excluding some results from investments and policies sold before the company went public, exceeding by 14 cents the average estimate of 13 analysts surveyed by Bloomberg. Net income was $14 million, the company said late yesterday.

Chief Executive Officer John Strangfeld has slashed the dividend and applied for U.S. bailout funds to guard against investment declines amid the recession. Life insurers, whose portfolios were battered by stock and bond declines, have recovered from lows in March as equity markets rallied.

"Prudential's first-quarter results displayed similar positive trends to what we have seen in its peers," Nigel Dally, an analyst with Morgan Stanley in New York, said yesterday in a research note. Prudential's report showed "stronger earnings resilience to the challenging environment, stability in investment portfolio metrics, and less than expected pressure on book value."

Prudential shares have gained about 36 percent this year, after the Newark, New Jersey-based insurer slumped 67 percent in 2008.

MetLife Inc., the largest life insurer, climbed $1.41, or 4.4 percent to $33.76. Hartford Financial Services Group Inc. advanced 9.7 percent to $16.53. Lincoln National Corp added 7.8 percent and Principal Financial Group Inc. gained 1.2 percent.

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