Prudential Swings to 4Q Loss on $1.2B Yen Charge

Insurer Prudential said Wednesday it took a loss in the fourth quarter after it took a charge of $1.2 billion related to the decreased value of the Japanese yen and other changes in currency exchange rates.

In recent quarters, Prudential Financial Inc. has reported a slew of charges related to the lower value of the yen. Those included a $2.5 billion charge in the first quarter of 2013 and a $1.56 billion charge in the second quarter of the year. In the third quarter, it reported $1.2 billion in gains, as the yen increased in value compared to other currencies.

The company lost $427 million, or 94 cents per share, in the most recent quarter. It lost $185 million, or 42 cents per share, a year earlier. Excluding one-time charges and gains, the company said its income rose to $2.20 per share from $1.76 per share. Revenue fell 76 percent, to $10.98 billion from $46.15 billion.

Analysts expected income of $2.24 per share on $11.49 billion in revenue, according to FactSet.

In the fourth quarter of 2012, Prudential bought large pension funds from General Motors Co. and Verizon Communications Inc. GM paid Prudential $25 billion as part of the deal between the two companies, and Verizon paid it $2.5 billion.

The Hartford, Conn., company operates retirement and investment management businesses, as well as individual life and group insurance coverage. It is the second-largest insurer in the U.S., after MetLife.

For the full year, Prudential lost $713 million, or $1.55 per share. Its revenue dropped 44 percent, to $45.28 billion. Excluding special items, its net income rose to $9.67 per share from $6.40 per share.

On Wednesday, shares of Prudential rose 20 cents, to $82.72. Subsequently, they lost $1, or 1.21 percent, to $81.72 in after-hours trading.

This article appeared in print in the February 6th, 2014 edition of Hamodia.