Earnings Preview: Prudential Financial

Prudential Financial (PRU) is expected to report Q2 earnings after market close Wednesday, July 30 with a conference call scheduled for Thursday, July 31 at 11:00 am ET.

Guidance

Analysts are looking for EPS of $1.85 on revenue of $6.92B. The consensus range for EPS is $1.78 to $1.91, while the consensus range for revenue is $6.81B to $7.07B, according to First Call.

Analyst Views

Two of Prudential's peers in the insurance sector recently reported very different Q2 results. Hartford Financial (HIG) easily beat the consensus EPS estimate and released significantly higher than expected 2008 EPS guidance. On the other hand, MetLife (MET) reported much lower than expected Q2 EPS and issued much lower than expected guidance for its 2008. Meanwhile, two research firms had conflicting outlooks on Prudential. After meeting with the company's management, Banc of America on July 2 contended that the stock's risk/reward level is compelling. While the firm believes that Prudential's earnings could be hurt by the slumping equity markets, they contend that the shares have already priced in this scenario. Moreover, Banc of America notes that Prudential still does not believe that its subprime holdings could cost it substantially more than $400M. The firm reiterated their Buy rating. Conversely, Friedman Billings on July 2 maintained their Market Perform rating on Prudential.

Oserweis Capital Management's highly regarded midcap blend fund added Prudential in Q1, the Wall Street Journal recently reported.