It has been about a month since the last earnings report for MetLife (MET Quick QuoteMET - Free Report) . Shares have added about 4.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is MetLife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

MetLife Q2 Earnings Top Estimates, Revenues Rise Y/Y

The company reported second-quarter 2021 adjusted operating earnings of $2.37 per share, which surpassed the Zacks Consensus Estimate by 47.2%. The bottom line improved to nearly three-fold year over year.

The company’s results benefited from uptick in revenues stemming from solid contributions by the U.S. and Asia segments, partly offset by elevated expenses.

Behind the Headlines

MetLife’s adjusted operating revenues of $16.2 billion improved 17% year over year on account of rise in premiums, fees and other revenues, and higher net investment income. However, the top line missed the Zacks Consensus Estimate by 0.2%.

Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT) rose 7% year over year to $11.1 billion in the quarter under review.

Adjusted net investment income of $5.1 billion soared 49% year over year, courtesy of growth in variable investment income resulting from improved private equity returns.

Total expenses inched up 1% year over year to $14 billion in the second quarter primarily due to increase in policyholder benefits and claims.

Adjusted expense ratio, excluding total notable items related to other expenses and PRT, improved 140 basis points (bps) year over year to 19.2%.

Adjusted book value per share of $56.38 climbed 8% year over year.

Adjusted return on equity improved 1,110 bps year over year to 17.5% in the quarter under review.

Segmental Performances

U.S.

Adjusted earnings in this segment surged 72% year over year to $902 million attributable to rise in variable investment income stemming from robust private equity returns.

Adjusted premiums, fees and other revenues amounted to $6.1 billion at the segment, which grew 8% year over year. The upside can be attributed to creation of an unearned dental premium reserve and crediting of premium to dental customers in the prior-year comparable period. The inclusion of Versant Health in the company’s results has provided a boost to the segment’s performance.

Asia

The segment reported adjusted earnings of $520 million, which doubled on a year-over-year basis. On a constant currency (cc) basis, adjusted earnings soared 91% year over year, courtesy of uptick in variable investment income and growing volumes.

Adjusted premiums, fees & other revenues inched up 1% year over year to $2 billion in the quarter under review.

Latin America

Adjusted earnings in the segment totaled $97 million, which slumped 27% year over year. Adjusted earnings on a cc basis plunged 38% year over year due to increased COVID-19 related claims, partly offset by improved variable investment income.

Adjusted premiums, fees & other revenues of $934 million climbed 27% year over year in the segment.

EMEA

Adjusted earnings from EMEA fell 19% year over year to $94 million. On a cc basis, adjusted earnings declined 23% year over year due to reduced utilization in the year-ago period coupled with increased COVID-19 linked claims during the current-year period. The downside was partly mitigated by rising volumes.

Adjusted premiums, fees & other revenues of $744 million improved 13% year over year.

MetLife Holdings

The segment’s adjusted earnings from MetLife Holdings amounted to $536 million, which increased to nearly 27-fold from the prior-year quarter. The improvement came on the back of favorable life underwriting and improved variable investment income.

Adjusted premiums, fees & other revenues of $1.2 billion decreased 2% year over year in the second quarter.

Corporate & Other

Adjusted loss of $60 million at the segment came in narrower than the prior-year quarter’s adjusted loss of $289 million.

Financial Update

MetLife exited the second quarter with cash and cash equivalents of $25 billion, which increased 26.5% from the figure at 2020 end.

The company’s long-term debt amounted to $14.5 billion, which dipped 0.6% from the 2020-end level.

Total shareholders’ equity as of Jun 30, 2021, was $69.1 billion, down 7.3% from the figure as of Dec 31, 2020.

Share Repurchase & Dividend Update

The company bought back shares worth $1.1 billion in the quarter under review.

Concurrent with second-quarter results, the board of directors authorized share repurchases worth $3 billion. The new $3-billion is an addition to the remaining $475 million under the company’s prior authorization unveiled in December 2020.

In April 2021, the company’s board of directors approved a 4.3% hike in its quarterly dividend, with the new dividend payout being 48 cents per share.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, MetLife has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

MetLife has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.