MetLife Turns To Profit In Q3, But Results Miss View

(RTTNews) - Insurance provider MetLife, Inc. (MET) on Wednesday reported a turnaround to profit in the third quarter on higher revenues. However, both operating earnings and revenue for the quarter missed analysts' estimates, reflecting higher payment of claims and benefits by the company to policyholders. The company's shares declined 3 percent in extended trades.

Steven Kandarian, chairman, president and chief executive officer of MetLife, said, "MetLife's third quarter results reflect continued growth in emerging markets, solid performance in the United States, and disciplined expense management. We are supplementing strong organic growth in emerging markets with acquisitions such as Provida, the largest pension provider in Chile, which closed earlier this month."

The New York-based company's third-quarter net income was $942 million or $0.84 per share, compared to net loss of $984 million or $0.92 per share in the same period last year. The latest quarter's results include net derivative losses of $355 million, after tax, and an after-tax charge of $69 million related to the annual actuarial assumption review.

MetLife uses derivatives as part of its broader asset-liability management strategy to hedge certain risks, such as movements in interest rates and foreign currencies. This hedging activity often generates derivative gains or losses and creates fluctuations in net income because the risk being hedged may not have the same GAAP accounting treatment.

Operating earnings for the quarter were $1.50 billion or $1.34 per share, compared to $1.42 billion or $1.32 per share in the previous-year quarter. On average, 20 analysts polled by Thomson Reuters expected the company to earn $1.36 per share for the quarter. Analysts' estimates typically exclude special items.

Operating earnings in the company's key region of Americas grew 7 percent from a year ago, while it declined 1 percent in Asia on a reported basis and increased 7 percent on a constant currency basis. Operating earnings in Europe, the Middle East and Africa or EMEA increased 37 percent on a reported basis and 28 percent on a constant currency basis.

Total operating revenues for the quarter rose 2 percent to $16.90 billion from $16.61 billion in the year-ago period. Analysts had a consensus revenue estimate of $17.20 billion.

Premiums, fees & other revenues for the quarter rose 3 percent, or 6 percent on a constant currency basis, to $11.86 billion. Net investment income was relatively flat with the year-ago period at $5.04 billion.

However, policyholder benefits and claims for the quarter increased 4 percent from the prior-year period to $9.32 billion.

At the end of the quarter, MetLife's book value per share was $52.54, down 10 percent compared to $58.35 in the same period last year.

MET closed Wednesday's regular trading at $49.00, down $0.20 or 0.41 percent on a volume of 4.35 million shares. In after-hours, the stock further declined $1.50 or 3.06 percent to $47.50.