UPDATE 1-Prudential Financial's adj profit misses estimates

Wed Feb 5, 2014 6:26pm EST

* 4th-qtr operating earnings $2.20 vs est $2.23

* Revenue from premiums falls 87 pct

Feb 5 (Reuters) - Prudential Financial Inc, the second-largest U.S. life insurer, reported a lower-than-expected adjusted operating income due to pretax losses related to the weakening of Japanese yen against the dollar.

The company booked a pretax charge of about $2.36 billion related to changes in currency rates, derivatives and investment losses. This included a $1.20 billion pretax cost related to foreign exchange, Prudential said.

Insurers, which use derivatives to hedge against fluctuations in interest rates, are being squeezed as the U.S. Federal Reserve's monthly bond-buying program has kept interest rates low to boost spending.

Net loss in the financial services businesses attributable to the company widened to $427 million, or 94 cents per share, for the quarter ended Dec. 30 from $185 million, or 42 cents per share, a year earlier.

Prudential's financial services businesses includes its U.S. retirement solutions and investment management, U.S. individual life and group insurance, and international insurance divisions and its corporate and other operations.

On an adjusted operating basis, Prudential earned $2.20 per share.

On an adjusted operating basis, revenue from premiums fell 87 percent to $5.26 billion, while total revenue fell 76 percent to $10.98 billion.

Analysts on average had expected earnings of $2.23 per share on revenue of $11.98 billion, according to Thomson Reuters I/B/E/S.

Shares of Newark, New Jersey-based Prudential closed at $82.72 on the New York Stock Exchange on Wednesday.

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