MET MetLife Inc

Prudential Financial Inc. reported a 12% decline in operating earnings in its fourth quarter, hurt by higher spending, though revenue declined less than Wall Street expected.

Shares fell 2.4% in after-hours trading.

Prudential is a life insurer that has annuities, retirement-income and asset-management businesses. The firm earns about half of its profit abroad, mostly from Japan, which has driven some negative foreign-exchange trends in recent quarters as the yen has faced pressure.

Prudential, like many in the insurance industry, has also been pressured by persistently low interest rates in the U.S. Low rates are particularly harmful because insurers of all stripes invest the premiums paid by customers to generate income while awaiting claims.

For the period ended Dec. 31, operating earnings were $891 million, or $1.94 a share, compared with $1 billion, or $2.12 a share, a year earlier.

Analysts polled by Thomson Reuters had expected $2.30 a share in operating earnings.

In the insurance industry, operating earnings are a widely watched benchmark because they exclude realized capital gains and losses from companies' investment portfolios, among other items that aren't considered recurring in nature on a quarterly basis.

Revenue fell 16% to $13.25 billion, while analysts had forecast revenue of $11.53 billion. Revenue from premiums fell 24% to $7.5 billion.

Analysts say Prudential could come under pressure to slim down after MetLife Inc. decided to shed a chunk of its U.S. life-insurance business.

The result could be a broader shake-up of the insurance industry's biggest companies as they contend with increasing regulatory pressures.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

(END) Dow Jones Newswires

February 10, 2016 18:05 ET (23:05 GMT)

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