Prudential Walks Past Estimates

Premium revenue rises 13%, while fee revenue jumps 20%.
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Prudential Financial

(PRU) - Get Report

, the nation's second-largest life insurer, reported sharply higher quarterly earnings that surpassed Wall Street expectations, in part due to the impact of several recent acquisitions.

In the quarter, the Newark, N.J.-based firm earned $519 million, or $1.02 a share, compared with $127 million, or 25 cents a share, in the year-ago period. The results reflect Prudential's recent acquisition of the retirement businesses from

CIGNA

and

American Skandia

.

Excluding nonoperating and investment items, the firm earned $495 million, or 97 cents a share, compared to $357 million, or 66 cents a share, a year ago. On that basis, Prudential easily beat the Thomson First Call consensus estimate of 78 cents a share. The year-ago quarter included a $410 million pretax charge for divested businesses.

Total revenue was $5 billion, up from $4.7 billion last year and above the consensus estimate of $4.7 billion.

Prudential also tweaked its earnings outlook for the full year, bringing it more in line with what analysts had been forecasting. The firm says it now expects full-year earnings to range between $3.15 and $3.25 a share. Its earlier forecast had said earnings could be as low as $3.05.

Prudential reported its quarterly earnings two days after the federal government included its Newark headquarters on a list of financial buildings al Qaeda terrorists may be targeting. The terror warning has the company and local police to take additional steps to bolster security at the building, which is one of the tallest in the Newark skyline.

"Our second-quarter results reinforce our confidence that Prudential Financial is on track toward our targeted returns," said Chairman and CEO Arthur Ryan, in a press release.

In the quarter, revenue from premiums rose 13% to $2.2 billion. Revenue from fees and charges rose 20% to $580 million. But commissions and investment management fees fell 12% to $933 million.

Expenses rose 5% to $4.4 billion.

Prudential shares close trading Tuesday at $45.75, down 34 cents.