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Did Prudential Financial beat or miss consensus estimates last quarter?

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- **Q3 Record Performance**: $1.9B pretax AOI (+28% YoY), driven by spread income and fee growth across all segments. 
- **Strategic Growth**: Japan sales +35% over 3 years; Brazil Life Planner channel sets new records. 
- **PGIM Margin Expansion**: 2026 target 25-30% margin, enabled by $100M+ annual savings reinvested in growth. 
- **Challenges**: Jennison equity outflows, $3-4B Q3 VA runoff, Japan surrender headwinds. 
- **Capital Strength**: >$3.9B liquidity, Japan ESR >150% target, 10.5-8.5% expense target.

**【CEO Summary Section】**
- **Record Q3 Results**: Pretax adjusted operating income of $1.9 billion, up 28% YoY, driven by spread income, underwriting, and fee income across all businesses. 
- **Business Momentum**: 
  - PGIM achieved $1.5T AUM, +5% YoY, with 70%+ assets outperforming benchmarks over 5+ years. 
  - Individual Retirement sales >$3B for 7th straight quarter; Group Insurance sales +14% YoY. 
  - Japan sales +35% over 3 years, Brazil sets new Life Planner channel record. 
- **Strategic Actions**: 
  - Sold PGIM Taiwan to focus on higher-growth opportunities. 
  - Reorganized PGIM into unified asset manager model, targeting 200+ bps margin expansion by 2026. 
  - Appointed Brad Hearn as Japan CEO to accelerate growth in retirement market. 

**【CFO Financial Commentary】**
- **PGIM Performance**: 
  - $40M reorg charges offset by $25M Taiwan sale gain. 
  - 2026 margin target: 25-30%, with $100M+ annual savings reinvested 1/3 into sales. 
- **U.S. Businesses**: 
  - Retirement Strategies: $10B Q3 sales, including $2.3B Jumbo PRT. 
  - Individual Life sales +20% YoY, driven by FlexGuard VUL. 
  - Group Insurance benefits ratio 83%, stable at low end of target range. 
- **International**: 
  - Japan sales +4% YoY despite yen volatility; Brazil Life Planner channel records. 
  - $30M+ Q4 expense increase due to timing. 

**【Q&A Key Highlights】**
- **Pension Risk Transfer (PRT)**: $3T untransacted U.S. liabilities; Q3 Jumbo PRT +28% YoY. Global LRT market >$50B/yr. 
- **PGIM Flows**: Total $2.4B Q3 inflows (1.8B affiliated, 0.6B third-party), offset by Jennison equity outflows. 
- **Legacy VA Runoff**: $3-4B Q3 runoff, $100-150M annual AOI impact. Japan surrenders stabilizing but still headwind. 
- **Japan ESR Target**: 150% stress level (vs. 180-200% current), supported by >$3.9B liquidity. 
- **Private Credit**: 90%+ investment-grade portfolio; $14B+ direct lending AUM post-Deerpath acquisition. 
- **Tech/AI**: Accelerating investments in customer experience and efficiency, with significant but undisclosed spend.

Prudential Financial, Inc. (PRU) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PRU

PRU fundamentals

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