UPDATE: Prudential Posts 1Q Financial-Serv Loss, Cuts View

(Updates with spokewoman explanating jump in asset-management fees, adds detail on financial-services results versus total company results, and updates stock quote)

Prudential Financial Inc. (PRU) swung to a first-quarter financial-services loss on $718 million of investment write-downs, its third straight period of red ink.

But shares rose 4.0% to $37.00 in after-hours trading as the results topped Wall Street's expectations and the company cut its 2009 earnings guidance by 45 cents a share to $4.80 to $5.20.

Chairman and Chief Executive John R. Strangfeld Jr. said the latest results "continue to reflect unfavorable market and economic conditions."

Insurers have been stung by many billions of investment losses, while credit rating downgrades have made it more difficult to raise capital. Prudential is among the companies eligible for government funds under the Treasury Department's Troubled Asset Relief Program, though no awards have been announced.

Prudential, the second-largest insurer by assets behind MetLife Inc. (MET), reported total companyearnings of $14 million, down from $60 million a year earlier. Those results include Prudential's closed-block business, made up of life-insurance and annuity policies that it sold when it was a mutual company but no longer offers.

Prudential's financial-services business reported a loss of $5 million, compared with a prior-year profit of $68 million. Excluding investment gains and losses and other items, earnings declined to $1.05 a share from $1.57.

Financial-services revenue climbed 16% to $8 billion as asset-management and related fees more than doubled.

A spokeswoman said the fees' total included a $1.3 billion benefit from the change in the valuation of the company's liability for its annuities. Excluding that amount, the fees fell 27%.

Analysts' estimates were for per-share financial-services earnings of 83 cents on revenue of $6.58 billion, according to a poll by Thomson Reuters.

Assets under management slid 2.9% to $542 billion from Dec. 31, 2008.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; [e-mail]