Voya Financial, Prudential, MetLife Miss 3Q Estimates

Voya Financial Inc., the New York-based annuity, retirement, insurance and employee benefits giant, reported third-quarter net income of $40.3 million, a 90 percent drop from the $406 million profit the company reported in the year-ago period.

Net income per share diluted was 18 cents compared to $1.59 per share diluted in the year-ago period, the company also said Wednesday.

Adjusted for nonrecurring costs, earnings came to 42 cents per share. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 79 cents per share.

The company also reported third quarter revenue of $210 million, which also fell short of Wall Street estimates. Thirteen analysts surveyed by Zacks expected revenue of $326.7 million.

“Despite the market volatility we saw during the quarter, our most equity market sensitive businesses — Retirement and Investment Management — performed well,” said chairman and CEO Rodney O. Martin Jr., in a news release.

The company’s annuity segment reported adjusted operating earnings of $63 million in the third quarter compared with $61 million in the year-ago period, the company said.

But in the individual life segment, the company reported third quarter adjusted operating earnings of $19 million, compared to $47 million in the year-ago period due to higher mortality claims severity.

Prudential Financial Inc.

Prudential Financial Inc., the Newark, N.J.-based global life, annuity and retirement services company, reported third-quarter net income of $1.46 billion Wednesday, compared with $465 million in the year-ago period.

Net income per share diluted for the quarter was $3.16. Adjusted for nonrecurring costs, operating income was $1.1 billion, compared to $1 billion in the year-ago period, the company reported. Operating income per share was $2.40, missing Wall Street expectations.

The average estimate of 10 analysts surveyed by Zacks called for operating income of $2.43 per share.

Third-quarter revenue of $9.53 billion also fell short of expectations. Three analysts surveyed by Zacks were looking for revenue of $11.1 billion.

Pre-tax operating income in each of the company’s individual annuities, retirement, asset management and individual life segments was lower in the quarter compared to the year-ago period, the company said.

Prudential’s individual annuities business is “showing success with its diversification strategy,” as the bulk of the company’s annuity sales don’t retain living benefit risk linked to the performance of stock markets, said Chairman and CEO John Strangfeld said in a news release.

MetLife Inc.

Third-quarter net income at New York-based MetLife Inc. was $1.2 billion, a 42 percent drop from the year-ago period, the company reported.

Net income per share dropped 41 percent to $1.06, the company said Wednesday.

Adjusted for nonrecurring gains, operating income was 62 cents per share, a drop of 61 percent from the year-ago period.

The average estimate of 10 analysts surveyed by Zacks called for operating income of 76 cents per share, Automated Insights reported.

Third-quarter revenue of $15.7 billion missed Wall Street expectations by $1.65 billion, Automated Insights said.

“Macroeconomic factors, including foreign currency, equity market and interest rates, as well as a previously announced non-cash tax-related charges, negatively impacted MetLife’s third quarter results,” said Steven A. Kandarian, chairman, president and CEO of MetLife, in a news release.

In the company’s retail segment revenue from premiums, fees and other sources was $3.3 billion, a drop of 5 percent from the year-ago period due to lower sales of single premium immediate annuities (SPIA) and lower annuity balances, the company said.

Retail life insurance sales rose 36 percent compared to the year-ago period, and retail annuity sales rose 20 percent, also over the year-ago period, the company said.

American Equity Investment Holding Co.

American Equity Investment Holding Co., a top seller of fixed index annuities, reported third-quarter net income of $97.3 million compared to $67.8 million in the year-ago period, on record sales of $1.8 billion.

Third-quarter net income per share diluted was $1.19 compared to 85 cents in the year-ago period, the company also reported Wednesday.

Operating income for the third quarter dropped 28 percent to $45.9 million, said the company, based in West Des Moines, Iowa. Operating income per share diluted was 56 cents per share.

Third-quarter sales were $1.8 billion, a rise of 70 percent from the year-ago period, and a 2 percent increase compared to the second quarter, the company said. American Equity is $200 million short of its $5.1 billion sales record set in 2011.

President and CEO John Matovina hinted at a record-breaking year.

“Our product and service mix has never been more competitive, and we expect strong sales in the fourth quarter,” said Matovina, in a news release. “Those sales may get an additional boost from impending changes to our lifetime income benefit riders. “

Agents are motived to sell still more annuity contracts for the remainder of the year because changes to mortality rates used to establish reserves in 2016 will mean less generous benefits attached to policy riders written after 2015, Matovina said.

American Equity sells fixed indexed and fixed rate annuity products, as well as life insurance through American Equity Life, American Equity of New York and Eagle Life Insurance Co. The company also sells its products to National Guard and firefighter associations.

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

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