February 8, 2017 / 10:06 PM / 10 months ago

UPDATE 1-U.S. insurer Prudential reports better-than-expected profit

(Compares results with estimates, adds shares and Q4 details)

Feb 8 (Reuters) - Prudential Financial Inc, the second-largest U.S. life insurer, reported a better-than-expected quarterly profit, helped by strength in its U.S. retirement and investment management business.

Adjusted operating earnings in the U.S. retirement solutions and investment management business rose 24.2 percent to $964 million in the fourth quarter. Prudential also reported a rise in operating earnings for all its major businesses.

“While we continue to face uncertainties and challenges in the macro environment, we remain confident in our long-term business outlook and ability to produce differentiated returns,” Chief Executive John Strangfeld said in a statement.

On an adjusted operating basis, Prudential earned $2.46 per share, beating the average analyst estimate of $2.32, according to Thomson Reuters I/B/E/S.

However, the company’s net profit more than halved as it recorded $824 million in investment losses and charges.

MetLife, the largest U.S. life insurer, posted a quarterly loss last week, hurt by a $3.2 billion derivative loss.

Prudential, like its peers, counts on its derivatives program to smooth out risks stemming from volatile currency exchange rates, equities markets and interest rate changes.

Net profit attributable to the company fell to $284 million, or 65 cents per share, in the quarter ended Dec. 31, from $735 million, or $1.60 per share, a year earlier.

Prudential’s shares, which have surged about 19 percent since the U.S. presidential election, were marginally down in extended trading on Wednesday.

Insurance stocks have been on a rally on expectations that profits will be boosted by President Donald Trump’s plans to cut corporate taxes and ease regulatory restraints. (Reporting by Sruthi Shankar in Bengaluru; Editing by Maju Samuel)

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