Prudential slips following drop in US earnings

SHARES in star stock Prudential slipped yesterday despite total sales passing £1bn during the first three months of 2013.

Despite new business coming in ahead of consensus, traders reacted badly to a hefty profits fall at the company’s US business and pushed the shares down 1.7 per cent.

However, long-term investors will not be complaining, given that the shares have already risen by more than 20 per cent this year.

Total new business profits rose five per cent to £563m for the quarter, with the fast-growing Asian division providing well over half this total.

In contrast new UK business slipped two per cent to £185m, which Prudential ascribed to new regulations – known as the retail distribution review – that ban the payment of commission to financial advisers.

Investors will hope the domestic division can be revived by the arrival of former Standard Life finance chief Jackie Hunt, who resigned last month to take over as Prudential’s UK and European boss.

Meanwhile, assets under management at the firm’s M&G investment division rose by a hefty 17 per cent to hit a total of £238.4bn.

Eamonn Flanagan, an analyst with Shore Capital, praised the company’s performance and told investors to take advantage of the share price dip: “Prudential has demonstrated commendable pricing discipline and we would view any weakness as a buying opportunity.”