(Bloomberg News) Prudential Financial Inc., the second-biggest U.S. life insurer, said first-quarter profit decreased 13% on losses tied to derivatives.

Net income fell to $608 million from $697 million a year earlier, the Newark, N.J.-based company said today in a statement. Operating profit, which excludes the results of policies sold before the company went public and some investments, was $1.69 a share. The average estimate of 19 analysts surveyed by Bloomberg was $1.47 a share.

Realized investment losses widened to $360 million from $60 million a year earlier. Prudential has phased out securities-related businesses as Chairman and Chief Executive Officer John Strangfeld, 57, focuses on life insurance and retirement products. The company has added to operations in Japan, the world's second-largest life insurance market after the U.S., through acquisitions.

"Prudential used to be much more of a broker-dealer; they had equity research," said Randy Binner, an analyst with FBR Capital Markets, before the announcement. "The strategic shift has been to become much more of an insurance company." He rates Prudential "outperform."

Prudential has gained 6.3% this year, more than the 3.9% advance of MetLife Inc., the biggest U.S. life insurer. Prudential declined 75 cents, or 1.2%, to $62.43 as of 4:04 p.m. in New York Stock Exchange composite trading before the earnings announcement.

Boosting Sales

Prudential and New York-based MetLife have boosted sales in the U.S. since 2008, taking market share from smaller rivals that scaled back after losses during the recession. Prudential, which declined a bailout in 2009, jumped to No. 1 among sellers of variable annuities in the U.S. that year.

Strangfeld agreed last month to sell a commodities business to investment bank Jefferies Group Inc. for $430 million. Prudential shut its institutional-brokerage unit in 2007 and sold a minority stake in a securities-brokerage business to Wells Fargo & Co. in 2009.

Prudential expanded in Japan in February by completing the $4.8 billion acquisition of Star Life Insurance Co. and Edison Life Insurance Co. from American International Group Inc. Prudential has generated more than a fifth of its revenue from the country.

MetLife acquired American Life Insurance Co. from AIG in November for about $16 billion, including a business in Japan.