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MetLife (MET) Q4 Earnings Beat Estimates, Revenues Miss
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MetLife, Inc.’s (MET - Free Report) fourth-quarter 2016 earnings of $1.35 per share beat the Zacks Consensus Estimate by a penny and increased 1.5% year over year.
The company generated operating revenues of $17.2 billion, missing the Zacks Consensus Estimate of $17.3 billion. MetLife’s premiums, fees and other revenues slipped 0.71% year over year to $12.3 billion.
In the reported quarter, the company’s total operating expenses increased 1% year over year to $15.4 billion.
Operating earnings in this segment increased 19% year over year to $516 million, led by higher contribution from the sub-segments Group Benefits & Retirement and Income Solutions. Operating premiums, fees & other revenues increased 4% to $5.8 billion.
Asia
Operating earnings were up 13% (or 8% on a constant currency basis) year over year to $354 million, driven by volume growth, favorable markets and a tax-related item in Japan. Operating premiums, fees & other revenues in Asia increased 5% (down 2% on a constant currency basis) to $2.1 billion.
Latin America
Operating earnings were $122 million, down 5% (up 5% on a constant currency basis) year over year as an outcome of a one-time tax benefit in the prior-year quarter and higher expenses in the reported quarter. Operating premiums, fees & other revenues were $913 million, down 2% (up 5% on a constant currency basis).
EMEA
Operating earnings from EMEA increased 33% (or 44% on constant currency basis) year over year to $72 million. Operating premiums, fees & other revenues were $622 million, almost unchanged from the prior-year period and up 4% on a constant currency basis, driven by growth in employee benefits and accident & health.
MetLife Holdings
Operating earnings for MetLife Holdings were $199 million, down 25% year over year due to unfavorable underwriting and certain insurance adjustments, including charges related to separation activities. These adjustments were partially offset by lower expenses, including those related to the sale of the MetLife Premier Client Group in 2016.
Brighthouse Financial
Brighthouse Financial reported operating earnings of $330 million, down 15% year over year, primarily due to life reserve changes and lower separate account fees. Operating premiums, fees & other revenues decreased 18.8% year over year to $1.3 billion, due to lower single premium income annuity sales.
Investment & Financial Update
In the reported quarter, net investment income increased 4% year over year to $5 billion. Variable investment income increased more than twofold to $301 million from $109 million in the year-ago quarter driven by the strong performance of private equity investments.
Book value per share decreased 2.6% year over year to $41.14.
Developments During the Quarter
The company approved a new $3 billion share buyback authorization. The company also took an important step in the spin-off of its unit Brighthouse Financial, dealing with MetLife’s U.S. retail business, by filing a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission. The first step in the separation transaction is expected to take place in the first half of 2017.
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MetLife (MET) Q4 Earnings Beat Estimates, Revenues Miss
MetLife, Inc.’s (MET - Free Report) fourth-quarter 2016 earnings of $1.35 per share beat the Zacks Consensus Estimate by a penny and increased 1.5% year over year.
The company generated operating revenues of $17.2 billion, missing the Zacks Consensus Estimate of $17.3 billion. MetLife’s premiums, fees and other revenues slipped 0.71% year over year to $12.3 billion.
In the reported quarter, the company’s total operating expenses increased 1% year over year to $15.4 billion.
Segment Details
U.S.
Operating earnings in this segment increased 19% year over year to $516 million, led by higher contribution from the sub-segments Group Benefits & Retirement and Income Solutions. Operating premiums, fees & other revenues increased 4% to $5.8 billion.
Asia
Operating earnings were up 13% (or 8% on a constant currency basis) year over year to $354 million, driven by volume growth, favorable markets and a tax-related item in Japan. Operating premiums, fees & other revenues in Asia increased 5% (down 2% on a constant currency basis) to $2.1 billion.
Latin America
Operating earnings were $122 million, down 5% (up 5% on a constant currency basis) year over year as an outcome of a one-time tax benefit in the prior-year quarter and higher expenses in the reported quarter. Operating premiums, fees & other revenues were $913 million, down 2% (up 5% on a constant currency basis).
EMEA
Operating earnings from EMEA increased 33% (or 44% on constant currency basis) year over year to $72 million. Operating premiums, fees & other revenues were $622 million, almost unchanged from the prior-year period and up 4% on a constant currency basis, driven by growth in employee benefits and accident & health.
MetLife Holdings
Operating earnings for MetLife Holdings were $199 million, down 25% year over year due to unfavorable underwriting and certain insurance adjustments, including charges related to separation activities. These adjustments were partially offset by lower expenses, including those related to the sale of the MetLife Premier Client Group in 2016.
Brighthouse Financial
Brighthouse Financial reported operating earnings of $330 million, down 15% year over year, primarily due to life reserve changes and lower separate account fees. Operating premiums, fees & other revenues decreased 18.8% year over year to $1.3 billion, due to lower single premium income annuity sales.
Investment & Financial Update
In the reported quarter, net investment income increased 4% year over year to $5 billion. Variable investment income increased more than twofold to $301 million from $109 million in the year-ago quarter driven by the strong performance of private equity investments.
Book value per share decreased 2.6% year over year to $41.14.
Developments During the Quarter
The company approved a new $3 billion share buyback authorization. The company also took an important step in the spin-off of its unit Brighthouse Financial, dealing with MetLife’s U.S. retail business, by filing a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission. The first step in the separation transaction is expected to take place in the first half of 2017.
MetLife carries a Zacks Rank #4 (Sell).
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. Price, Consensus and EPS Surprise | MetLife, Inc. Quote
Performance of Other Players
Other insurers Lincoln National Corp. (LNC - Free Report) , Torchmark Corp. , Unum Group (UNM - Free Report) each with a Zacks Rank #2 (Buy) reported better-than-expected fourth-quarter earnings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>