Prudential says its Japan sales halt cost about $140 million in the third quarter

Prudential Financial said Thursday that the halt on new sales at its Prudential of Japan unit cut about $140 million from its Japan businesses' pretax adjusted operating income in the third quarter, in a preliminary filing that also showed assets at its PGIM investment arm slipping from June.

What the Japan sales halt cost in the quarter

The estimate, furnished in a Form 8-K ahead of Prudential's full third-quarter report on Nov. 3, includes one-time costs mainly tied to compensation for Prudential of Japan's Life Planner sales force, along with lost sales and the effect of policy surrenders. Prudential called the figures estimated and unaudited and said actual results could differ materially once it finishes closing its books.

For scale, the Japan Businesses segment, restated under Prudential's new reporting structure, earned $694 million of pretax adjusted operating income in the second quarter of 2026 and $750 million in the third quarter of 2025, according to a revised supplement filed with the 8-K.

On Oct. 9, after Japan's Financial Services Agency ordered Prudential of Japan to stop soliciting new business from Oct. 13 through Jan. 31, 2027, extending a sales pause the unit began voluntarily in February, the company estimated the suspension would reduce the unit's pretax adjusted operating income by about $500 million in 2026 and by $500 million to $550 million in 2027, keeping the two-year total near $1 billion. The same presentation said the company expects no material impact on capital, ESR or cash flows in 2026 or 2027. It separately estimated about $275 million of pretax adjusted operating income impact across 2026 and 2027 at Gibraltar Life, whose Life Consultant channel is suspended through the same date. Thursday's filing did not update those estimates.

PGIM's assets slip and a fee line shrinks

PGIM, Prudential's asset-management arm, ended September with $1.47 trillion under management. That compares with $1.49 trillion at the end of June and $1.47 trillion a year earlier, according to the restated second-quarter supplement.

PGIM's other related revenues, net of related expenses, came to about $20 million on an adjusted operating basis. The line includes incentive and transaction fees, results from seed and co-investments, and mortgage origination revenue. The supplement shows the same measure at $57 million in the second quarter and $64 million in the third quarter of 2025. The filing did not explain the decline.

One line moved the other way. Alternative investment income in Prudential's general account, which covers private equity, hedge fund and real estate holdings and excludes the Closed Block Division and funds-withheld portfolios, is estimated at about $15 million to $35 million above the company's near-term expectations.

A slimmer international segment

The filing also put a reporting change into effect. After announcing in August that it plans to exit certain emerging-markets businesses, Prudential now counts operations including Brazil and Mexico among divested and run-off businesses in its Corporate and Other results, and has renamed its International Businesses segment Japan Businesses. Its indirect 40% stake in pension fund manager AFP Habitat moves into the Retirement segment. The changes apply retrospectively and do not alter previously issued consolidated financial statements, the company said.

How the stock traded

Prudential shares closed at $116.35 on Thursday, up about 2.5% from Wednesday's close of $113.49. In after-hours trading they were at $114.40 at 7:34 p.m. ET, down about 1.7% from the close, according to CNBC market data.