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MetLife (MET) Q2 Earnings Fall Shy of Estimates, Tumble Y/Y

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MetLife, Inc.’s (MET - Free Report) second-quarter 2020 operating earnings of 83 cents per share missed the Zacks Consensus Estimate by 13.5% and also declined 39.9% year over year.

The company’s results were negatively impacted by lower revenues.

Behind the Headlines

The company’s operating revenues of $13.8 billion were down 15.9% year over year and also missed the Zacks Consensus Estimate by 9.9%.

Adjusted premiums, fees & other revenues excluding pension risk transfer were down 8% year over year to $10.5 billion.

Net investment income (adjusted) of $3.4 billion was down 24% year over year due to loss in variable investment income.

Total expenses of $13.9 million were down 8.5% year over year.

Adjusted expense ratio of 20.6% was up 60 basis points year over year.

Adjusted book value per share was $52.27, up 11% year over year.

Adjusted return on equity was 6.4%, down 570 basis points year over year.

MetLife, Inc. Price, Consensus and EPS Surprise MetLife, Inc. Price, Consensus and EPS Surprise

MetLife, Inc. price-consensus-eps-surprise-chart | MetLife, Inc. Quote

Quarterly Segment Details

United States

Adjusted earnings in this segment declined 29% year over year to $523 million due to lower variable investment income.

Adjusted premiums, fees & other revenues were $5.7 billion, down 15% year over year due to weak contributions from Group Benefits, Property & Casualty, and Retirement and Income Solution sub-segment.

Asia

Operating earnings of $256 million were down 29% year over year due to a decline in variable investment income. However, the same was partly offset by higher volume and expense margins.

Adjusted premiums, fees & other revenues were $2 billion, down 3% on constant-currency basis.

Latin America

Operating earnings of $132 million were down 17% year over year due to adverse foreign exchange rates.

Adjusted premiums, fees & other revenues were $737 million, down 31% due to soft annuity sales in Chile.

EMEA

Operating earnings from EMEA surged 51% year over year to $116 million, primarily driven by favourable underwriting and expense margins.

Adjusted premiums, fees & other revenues of $660 million inched up 2% year over year on constant-currency basis.

MetLife Holdings

Adjusted operating earnings from MetLife Holdings came in at $20 million, down 93% year over year due to lower variable investment income along with unfavourable underwriting margins.

Operating premiums, fees & other revenues were $1.2 billion, down 5% year over year.

Corporate & Other

The segment’s adjusted loss of $289 million in the second quarter was narrower than the adjusted loss of $307 million in the prior-year quarter.

Financial Update

As of Mar 31, 2020, shareholders’ equity was $64 billion, down 3.5% from the level at 2019 end.

Long-term debt as of the second-quarter end was $13.3 billion, down 0.9% from the level at 2019 end.

Cash and cash equivalents of $18 billion as of Mar 31, 2020 were up 11.1% from the level at 2019 end.

Zacks Rank & Peer Releases

MetLife currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of Arch Capital Group Ltd. (ACGL - Free Report) , Markel Corporation (MKL - Free Report) and AXIS Capital Holdings Limited (AXS - Free Report) beat the respective Zacks Consensus Estimate.

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