After almost all major insurance companies, including American International Group (NYSE:AIG) and MetLife (NYSE:MET) reported their quarterly earnings, Prudential Financial (NYSE:PRU) was among the last companies in the sector that reported their results last Thursday: And they were not as bad as many would want you to believe.

Prudential Financial reported weaker earnings year over year and missed analyst estimates mainly due to higher investment losses on derivatives. Nonetheless, Prudential Financial brings a lot of value to the table for investors who can see past short-term disappointment and look at the bigger picture.

1. Missing analyst estimates
If there is something such as a capital crime on Wall Street, it is missing consensus estimates of the analyst community. And, unfortunately, Prudential Financial did just that: It reported an after-tax adjusted operating income of $2.20 per share, which was sharply lower than last year's $2.89 per share. Analysts also expected higher operating income of $2.41 per share, which translates into an earnings miss of nearly 9%.

And if investors hate anything, it is missing expectations. Correspondingly, shares of Prudential Financial were sold off sharply on Thursday and closed down 5% lower.

2. One-off effects impacting Prudential Financial's results
When it comes to insurance companies, it is very important to differentiate whether losses happen on the insurance side, which is Prudential Financial's underwriting, or on the investment side of the business.

This is an important distinction, because it can give investors vital clues about the quality of an insurance company's earnings.

Prudential Financial, for instance, saw further premium momentum in the third quarter of 2014 in its financial services business with total premiums reaching $5.9 billion, up more than 9% year over year, which is clearly a good sign.

Prudential Financial also benefited from higher account values across its product portfolio: Retirement account values were up 14% to $356.1 billion, annuity account values rose 6% to $156.8 billion, and funds in Prudential Financial's asset management division grew 11% to $543.7 billion.

Though Prudential Financial's premium growth and insurance operations look solid, realized investment losses negatively affected third quarter results and are largely to blame for Prudential Financial's weaker than expected earnings.

In the most recent quarter, the insurance company reported $1.13 billion in pre-tax net realized investment losses, of which $970 million relate to derivatives, into which Prudential Financial enters for hedging purposes.

Prudential Financial's third-quarter net realized investment losses last year only stood at $556 million, which implies that investment losses more than doubled compared to last year. However, investment losses are technically one-off items, which means they are not of a recurring nature. Consequently, investors should not make the mistake to overemphasize the occurrence of such losses or expect the company to continue to post losses in the coming quarters.

3. The big picture
In light of weaker performance results, it is important to realize how far Prudential Financial has already come. By the same token, investors should not always expect a company to have an easy ride from one record quarter to the next.

Setbacks do occur occasionally, especially if derivatives are involved whose market values can fluctuate greatly in any given quarter, but Prudential Financial's earnings and profitability trend should not be discounted solely because of its softer third-quarter performance.

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Source: Prudential Financial Investor Presentation June 9, 2014, Prudential Financial EPS and ROE development 2010-2013

The Foolish Takeaway
Of all the insurance companies delivering earnings this season, Prudential Financial has probably disappointed the most. But softer earnings were largely the result of investment losses in Prudential Financial's derivatives portfolio, which should not be treated as recurring items that will similarly affect the company's future profitability.

In fact, with ongoing premium growth and rising account values, which attest to Prudential Financial's strong insurance franchise, the dip in share price might actually be a buying opportunity.

Kingkarn Amjaroen owns shares of American International Group. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: long January 2016 $30 calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.