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Metlife (MET) to Announce Q1 Earnings: What's in the Offing?

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MetLife, Inc. (MET - Free Report) is slated to report first-quarter 2021 results on May 5, after the market closes.

In the fourth quarter, MetLife’s bottom line of $2.03 per share beat the Zacks Consensus Estimate by 32.7% and also grew 3% year over year. The company’s results benefited from higher revenues, robust underwriting results and an improved variable investment income, partly offset by elevated costs.

Q1 Earnings & Revenue Expectations   

The Zacks Consensus Estimate for earnings of $1.48 per share implies a 6.33% decrease from the prior-year quarter’s reported number. Likewise, the consensus estimate for sales of $16.20 billion suggests a 4.26% rise from the year-ago quarter’s reported figure.

Factors to Note

Beginning the first quarter of 2021, Property and Casualty segment will be reflected as a divested business in the company’s financial statements at the impending earnings announcement. Consequently, the unit will remain excluded from adjusted earnings for the full year.

In the to-be-reported quarter, lower interest rates might have weighed on the company’s investment income.

With regard to MetLife’s segments, the company’s U.S. business is likely to have benefited from a strong performance across its Group Benefits, and Retirement and Income Solutions (RIS) subsegments. While higher variable investment income, favorable underwriting margins and volume growth might have provided a boost to RIS, improved dental and disability results are expected to drive the Group Benefits business in the to-be-reported quarter. Also, for Group Benefits business, adjusted premiums, fees and other revenues (PFOs) are likely to have grown on the Versant Health acquisition.

On the flip side, catastrophe losses are likely to have dented the performance of the Property & Casualty subsegment in the to-be-reported quarter.
In Asia, improved variable investment income, strong underwriting capabilities and lower expense are likely to have aided the segment in the to-be-reported quarter.

However, soft underwriting results and higher COVID-related claims might have hindered growth at the Latin America segment in the to-be-reported quarter.

In the Europe, the Middle East and Africa (EMEA) segment, lower claims and group policies across the region are likely to have made a strong contribution to the underwriting margins. Further, improved expense margins and robust volumes are expected to have boosted the company’s performance in the quarter to be reported.

Earnings Surprise History

The company’s earnings beat estimates in three of the last four quarters (missed the mark in one), the average surprise being 8.24%.

MetLife, Inc. Price and EPS Surprise

MetLife, Inc. Price and EPS Surprise

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

Here is what our quantitative model predicts:

Our proven model does not predict an earnings beat for MetLife this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But this is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: MetLife has an Earnings ESP of +0.00%.

Zacks Rank: MetLife currently has a Zacks Rank #3.

Stocks to Consider

Some insurance stocks with the right combination of elements to beat on earnings this season are:

American International Group Inc. (AIG - Free Report) has an Earnings ESP of +0.24% and a Zacks Rank of 3, currently.You can see the complete list of today’s Zacks #1 Rank stocks here.

Voya Financial Inc. (VOYA - Free Report) has an Earnings ESP of +1.77% and is Zacks #3 Ranked, presently.

Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +9.26% and a Zacks Rank #2 at present.

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