UPDATE 2-Annuity accounting gains boost Prudential

* Operating earnings $2.12/shr, analysts’ estimate $1.43

* Japan acquisitions on track, changes funding mix

* Pretax benefit of $412 mln in annuities boosts results
(Adds SEC filing, details on operating results)

NEW YORK, Nov 3 (BestGrowthStock) – Prudential Financial (PRU.N: )
reported a larger third-quarter profit (Read more your timing to make a profit.) on Wednesday as the No.
2 U.S. life insurer recorded a huge benefit for accounting
changes in its annuity business.

Prudential also said its pending purchase of the Star and
Edison Japanese life insurance businesses from AIG (AIG.N: ) was
on track to close in the first quarter. In an SEC filing,
Prudential said it would sell fewer securities to pay for the
purchase, making up the difference with cash on hand.

Prudential reported a net profit of $1.17 billion, or $2.46
per share, up from a year-earlier profit of $1.09 billion, or
$2.35 per share.

Adjusted operating earnings, which exclude investment gains
and losses, were $2.12 per share. Analysts had expected
earnings of $1.43 per share in the quarter, according to
Thomson Reuters I/B/E/S.

Prudential said its operating income included a pretax
benefit of $412 million in its individual annuity business,
nearly twice what it recorded a year earlier. The benefit
relates to the way Prudential accounts for customer acquisition
costs, and to reserves for death and income benefits.

Aside from the gain, Prudential said operating results were
driven by the performance in its asset management business and
its international insurance operation.

Asset Management adjusted operating income rose five-fold
on better commercial mortgage and proprietary investing results
as well as higher fees. International insurance was also
boosted by investment gains as well as currency effects.

Operating income in U.S. individual and group life
insurance fell as the company saw higher claims and lost some

Prudential shares dipped 17 cents to $53.94 in after-hours
trading from a $54.11 New York Stock Exchange close.
(Reporting by Ben Berkowitz; Editing by Richard Chang, Bernard

UPDATE 2-Annuity accounting gains boost Prudential