MetLife, Prudential Beat Estimates

Prudential lowers guidance while MetLife raised it.
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Prudential Financial

(PRU) - Get Report

and

MetLife

(MET) - Get Report

, two of the nation's biggest life insurers, reported higher third quarter profits and operating earnings that beat Wall Street expectations Tuesday.

New Jersey-based Prudential posted net income of $401 million, or 70 cents a share, compared to $52 million, or 9 cents a share, in the year ago period.

MetLife, based in New York, posted net income of $328 million, or 45 cents a share, up from $162 million, or 21 cents a share.

Earnings last year at both insurers had been impacted by losses and write-downs stemming from the Sept. 11 terror attacks.

Most Wall Street industry analysts, however, had based their earnings estimates on operating earnings, a measurement of profitability that excludes certain after-tax investment losses and other charges. And based on that measurement, both insurers beat the consensus estimate as compiled by Thomson Financial First Call.

Prudential reported $309 million in operating income, or 54 cents a share. The First Call estimate was for 49 cents.

MetLife, meanwhile, reported $502 million in operating income, or 69 cents a share, some 9 cents higher than the consensus estimate.

But Prudential lowered its full-year earnings estimate to $2.10 a share, a sum that's three pennies below the consensus estimate of most Wall Street analysts, according to Thomson Financial First Call. The insurer blamed the uncertain equity markets for the lowered estimate.

MetLife, however, upped its full-year earnings estimate to between $2.52 and $2.59 a share. Analysts had been expecting the insurer to post 2002 earnings of $2.47 a share, according to First Call.

Both insurers have scheduled conference calls for Wednesday morning to discuss the results.

Like many other life insurers, both MetLife and Prudential incurred losses and writedowns on bad investments. It's because of all those losses on stock and bond investments that some industry analyst say it may take a

long time for profit margins to fully recover at the nation's life insurers.

MetLife's after-tax net investment losses totaled $169 million. Prudential incurred $142 million in investment related losses.P/>Both MetLife and Prudential reported higher revenue compared with a year ago, in part because they were able to sell more life-insurance policies. At MetLife, revenue rose 6% to $8.4 billion, while Prudential reported a 4% rise in revenue to $5.1 billion.

Total assets under management at Prudential, which also operates the Prudential Securities brokerage division, fell 5% to $533 million compared with a year ago. MetLife, meanwhile, reported a 4.8% rise in assets under management to $290 billion.