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MetLife, Inc. (MET - Free Report) reported first-quarter 2021 adjusted operating earnings of $2.20 per share, which surpassed the Zacks Consensus Estimate by 48.7%. Further, the bottom line improved 39% year over year.
The company’s results were driven by rise in revenues, higher variable investment income and strong performances at the U.S. and Asia segments, partly offset by escalating costs.
Behind the Headlines
Adjusted operating revenues at MetLife were $16.7 billion, which rose 8% year over year. The upside can be attributed to higher premiums, fees and other revenues coupled with rise in net investment income. The top line also beat the Zacks Consensus Estimate by 3.1%.
Adjusted premiums, fees and other revenues excluding pension risk transfer (PRT) of $11.4 billion increased 2% year over year in the quarter under review.
Adjusted net investment income amounted to $5.3 billion, which advanced 23% year over year primarily driven by rise in variable investment income stemming from improved equity market returns.
Total expenses increased 20.6% year over year to $15.3 billion in the quarter due to elevated policyholder benefits and claims, interest credited to policyholder account balances, interest expense on debt and other expenses.
Adjusted expense ratio, excluding total notable items related to other expenses and PRT, came in at 19%, which improved 70 basis points (bps) year over year.
Adjusted book value per share in the first quarter improved 2% year over year to $53.16.
Adjusted return on equity came in at 16.5%, reflecting an improvement of 390 bps year over year.
Adjusted earnings in this segment inched up 1% year over year to $784 million, courtesy of rise in variable investment income, partly offset by escalated COVID-19 mortality and Property & Casualty divestiture. Notably, results of the divested business have not been included in the segment’s first-quarter results.
Adjusted premiums, fees and other revenues of the segment rose 3% year over year to $6.4 billion attributable to well-performing Group Benefits and, Retirement and Income Solutions businesses. The inclusion of Versant Health in the company’s results has provided a boost to the segment’s performance.
Asia
Adjusted earnings totaled $623 million, which surged 78% year over year. Also, adjusted earnings on a constant currency (cc) basis soared 70% year over year stemming from improved variable investment income, volume growth and sound underwriting results.
Adjusted premiums, fees & other revenues climbed 4% year over year to $2.2 billion in the segment.
Latin America
Adjusted earnings slumped 58% year over year to $40 million. Also, adjusted earnings on a cc basis plunged 57% year over year primarily due to elevated COVID-19-linked claims across Mexico.
Adjusted premiums, fees & other revenues declined 5% year over year to $875 million in the quarter under review.
EMEA
Adjusted earnings from EMEA totaled $71 million, which decreased 9% year over year. Also, adjusted earnings on a cc basis slid 11% year over year due to elevated costs and higher COVID-19 related claims.
Adjusted premiums, fees & other revenues fell 3% year over year to $678 million in the quarter.
MetLife Holdings
Adjusted earnings from MetLife Holdings more than doubled year over year to $618 million attributable to rise in variable investment income. Also, favorable impact on long-term care benefited the segment's underwriting results.
However, adjusted premiums, fees & other revenues declined 6% year over year to $1.2 billion in the segment.
Corporate & Other
The segment reported an adjusted loss of $171 million in the first quarter, which compared favorably with the prior-year quarter’s adjusted loss of $131 million.
Financial Update
The company exited the first quarter with cash and cash equivalents of $19.6 billion, which inched down 0.8% from 2020-end level.
During the quarter, long-term debt dipped 0.6% from the level at 2020 end to $14.5 billion.
As of Mar 31, 2021, the company’s shareholders’ equity was $65.9 billion, down 11.7% from the 2020-end level.
Share Repurchase & Dividend Hike Update
In the reported quarter, the company bought back shares worth $1 billion.
In April 2021, the company’s board of directors approved a 4.3% hike in its quarterly dividend. The company will now pay out a dividend of 48 cents per share compared with the prior payout of 46 cents. The increased dividend will be paid on Jun 14, 2021 to shareholders of record as on May 11. Since 2011, MetLife has been raising quarterly dividends at a CAGR of 10%.
Of the multiline insurance industry players that have reported first-quarter results so far, the bottom line of Old Republic International Corporation (ORI - Free Report) , Assurant, Inc. (AIZ - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) beat the Zacks Consensus Estimate.
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MetLife (MET) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
MetLife, Inc. (MET - Free Report) reported first-quarter 2021 adjusted operating earnings of $2.20 per share, which surpassed the Zacks Consensus Estimate by 48.7%. Further, the bottom line improved 39% year over year.
The company’s results were driven by rise in revenues, higher variable investment income and strong performances at the U.S. and Asia segments, partly offset by escalating costs.
Behind the Headlines
Adjusted operating revenues at MetLife were $16.7 billion, which rose 8% year over year. The upside can be attributed to higher premiums, fees and other revenues coupled with rise in net investment income. The top line also beat the Zacks Consensus Estimate by 3.1%.
Adjusted premiums, fees and other revenues excluding pension risk transfer (PRT) of $11.4 billion increased 2% year over year in the quarter under review.
Adjusted net investment income amounted to $5.3 billion, which advanced 23% year over year primarily driven by rise in variable investment income stemming from improved equity market returns.
Total expenses increased 20.6% year over year to $15.3 billion in the quarter due to elevated policyholder benefits and claims, interest credited to policyholder account balances, interest expense on debt and other expenses.
Adjusted expense ratio, excluding total notable items related to other expenses and PRT, came in at 19%, which improved 70 basis points (bps) year over year.
Adjusted book value per share in the first quarter improved 2% year over year to $53.16.
Adjusted return on equity came in at 16.5%, reflecting an improvement of 390 bps year over year.
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. price-consensus-eps-surprise-chart | MetLife, Inc. Quote
Quarterly Segment Details
U.S.
Adjusted earnings in this segment inched up 1% year over year to $784 million, courtesy of rise in variable investment income, partly offset by escalated COVID-19 mortality and Property & Casualty divestiture. Notably, results of the divested business have not been included in the segment’s first-quarter results.
Adjusted premiums, fees and other revenues of the segment rose 3% year over year to $6.4 billion attributable to well-performing Group Benefits and, Retirement and Income Solutions businesses. The inclusion of Versant Health in the company’s results has provided a boost to the segment’s performance.
Asia
Adjusted earnings totaled $623 million, which surged 78% year over year. Also, adjusted earnings on a constant currency (cc) basis soared 70% year over year stemming from improved variable investment income, volume growth and sound underwriting results.
Adjusted premiums, fees & other revenues climbed 4% year over year to $2.2 billion in the segment.
Latin America
Adjusted earnings slumped 58% year over year to $40 million. Also, adjusted earnings on a cc basis plunged 57% year over year primarily due to elevated COVID-19-linked claims across Mexico.
Adjusted premiums, fees & other revenues declined 5% year over year to $875 million in the quarter under review.
EMEA
Adjusted earnings from EMEA totaled $71 million, which decreased 9% year over year. Also, adjusted earnings on a cc basis slid 11% year over year due to elevated costs and higher COVID-19 related claims.
Adjusted premiums, fees & other revenues fell 3% year over year to $678 million in the quarter.
MetLife Holdings
Adjusted earnings from MetLife Holdings more than doubled year over year to $618 million attributable to rise in variable investment income. Also, favorable impact on long-term care benefited the segment's underwriting results.
However, adjusted premiums, fees & other revenues declined 6% year over year to $1.2 billion in the segment.
Corporate & Other
The segment reported an adjusted loss of $171 million in the first quarter, which compared favorably with the prior-year quarter’s adjusted loss of $131 million.
Financial Update
The company exited the first quarter with cash and cash equivalents of $19.6 billion, which inched down 0.8% from 2020-end level.
During the quarter, long-term debt dipped 0.6% from the level at 2020 end to $14.5 billion.
As of Mar 31, 2021, the company’s shareholders’ equity was $65.9 billion, down 11.7% from the 2020-end level.
Share Repurchase & Dividend Hike Update
In the reported quarter, the company bought back shares worth $1 billion.
In April 2021, the company’s board of directors approved a 4.3% hike in its quarterly dividend. The company will now pay out a dividend of 48 cents per share compared with the prior payout of 46 cents. The increased dividend will be paid on Jun 14, 2021 to shareholders of record as on May 11. Since 2011, MetLife has been raising quarterly dividends at a CAGR of 10%.
Zacks Rank
MetLife currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multiline Insurers
Of the multiline insurance industry players that have reported first-quarter results so far, the bottom line of Old Republic International Corporation (ORI - Free Report) , Assurant, Inc. (AIZ - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) beat the Zacks Consensus Estimate.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>