Prudential Financial Reports $707 Million Net Income for Q1 2025, Down from $1.138 Billion in Q1 2024

Prudential Financial, Inc. (Prudential) reported net income attributable to the company of $707 million for the three months ended March 31, 2025, compared to $1.138 billion for the same period in 2024. This decrease primarily resulted from a $474 million unfavorable variance in the change in value of market risk benefits (net of hedging gains/losses) and a $183 million unfavorable variance in realized investment gains (losses), net. These decreases were partially offset by $85 million in favorable income tax variance and $71 million in favorable market experience updates. The company had $1.522 trillion in assets under management as of March 31, 2025.

Significant changes in the company's financial performance compared to the previous fiscal period included a decrease in premiums from $15.537 billion to $7 billion and a decrease in total revenues from $23.509 billion to $13.470 billion. The company also reported a net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents of $2.416 billion during the quarter. Operational changes included the retrospective application of a change in the reporting of International Businesses as a single segment, effective in the first quarter of 2025.

Strategic developments during the quarter included the completion of a reinsurance agreement with Prismic Re International in March 2025, reinsuring approximately $7 billion in reserves for Japanese whole life policies. An additional $134 million equity investment in Prismic was made to maintain a 20% equity interest. The company also exited PGIM Wadhwani LLP in July 2024, with results subsequently reported under Divested and Run-off Businesses. Furthermore, the company announced the full redemption of $1 billion in junior subordinated notes due in 2045.

Key operational developments included the repurchase of 2.2 million shares of common stock for $250 million during the quarter. PGIM's assets under management increased to $1.385 trillion as of March 31, 2025, primarily due to market appreciation, net inflows, and strong investment performance. The company also noted changes in its allowance for credit losses on commercial mortgage and other loans, primarily due to increased loan-specific reserves in the retail sector. The company's Japanese operations continued to invest in U.S. dollar-denominated assets, resulting in average reinvestment rates exceeding current average portfolio rates.

Prudential's outlook includes continued benefits from its mutually-reinforcing business system and efforts to become a leaner, more agile company. The company anticipates that the current market conditions, including the imposition of tariffs and retaliatory actions, could negatively impact its liquidity, capital positions, cash flows, results of operations, and financial position. The company also noted potential impacts from changes in interest rates, equity prices, and foreign currency exchange rates, as well as the costs and effects of executing its strategic plans.