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Prudential Financial’s $575 Million Japan Hit: Is The Earnings Reset Bigger Than It Looks?

Prudential Financial delivered first quarter results reflecting a 10% increase in after-tax adjusted operating income to approximately $1.3 billion, or $3.61 per common share, compared to the prior year. The first quarter pretax adjusted operating income was $1.6 billion with an adjusted operating return on equity near 15%. These figures were driven by higher spread income in the U.S. and international insurance segments and favorable life underwriting results, partially offset by higher operating expenses—including costs associated with the Prudential of Japan (POJ) sales suspension. The asset management division, PGIM, reported a 22% increase in pretax adjusted operating income to $190 million, aided by higher fees from market appreciation and agency earnings. PGIM’s assets under management rose 3% year-over-year to $1.4 trillion, with third-party net inflows reaching $1.8 billion despite continued active equity outflows consistent with industry trends.