MetLife Profit Soars On Lower Derivative Losses, Claims

(RTTNews) - MetLife Inc. (MET) Wednesday reported a surge in fourth-quarter profit, due mainly on lower derivative losses and a drop in claims, with earnings topping Wall Street estimates.

The largest life insurer in the U.S., MetLife has been capitalizing on growth in emerging markets such as Asia and Latin America. In December, the company acquired a majority stake in AmLife Insurance from AMMB Holdings Bhd for $249 million to further tap the potential in Southeast Asia.

The company also signed a 10-year distribution deal with Citigroup Inc to sell credit insurance products to Citi clients in emerging markets.

New York-based MetLife posted fourth-quarter net income of $877 million or $0.77 per share compared with $96 million or $0.09 per share last year.

Results for the recent quarter included after-tax derivative losses of $373 million, compared with losses of $1.3 billion in the prior year.

Excluding items, operating earnings for the quarter were $1.56 billion or $1.37 per share compared with $1.37 billion or $1.25 per share a year ago.

On average, 22 analysts polled by Thomson Reuters estimated earnings of $1.30 per share for the quarter. Analysts' estimates typically exclude special items.

MetLife uses derivatives as part of its asset-liability management strategy to hedge certain risks stemming from interest rates and foreign currencies.

Total revenues for the quarter were $18.38 billion compared with $18.36 billion in the prior year. Ten analysts polled by Thomson Reuters estimated revenues of $17.43 billion for the quarter.

Premiums, fees & other revenues for the quarter edged down 1 percent to $13.08 billion from $13.2 billion last year.

In Asia, operating earnings surged 64 percent to $324 million, while premiums, fees and other revenue fell 8 percent to $2.3 billion.

In the Americas, operating earnings climbed 13 percent to $1.4 billion, and premiums, fees & other revenues edged up 1 percent to $10 billion.

Net investment income was $5.3 billion, up 3 percent.

Corporate & other reported an operating loss of $274 million, compared with a loss of $137 million in the prior year, due to the strengthening of asbestos claim reserves.

Claims and benefits expense decreased to $10.34 billion from $10.7 billion a year earlier.

At the end of the quarter, MetLife had a book value of $53.04 per share, down 7 percent from last year.

Last week, rival Prudential Financial Inc. (PRU) posted a lower-than-expected operating earnings due to losses arising from a weak Japanese yen.

MetLife stock closed Wednesday at $49.88, up $0.12 or 0.24%, on a volume of 6.6 million shares on the NYSE. In after hours, the stock gained $0.12 or 0.24% at $50.00. In the past year, the stock has traded in the range of $33.89 - $54.70.