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MetLife (MET) Down 7.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for MetLife (MET - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is MetLife due for a breakout? 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's Q3 Earnings Beat Estimates, Improve Y/Y
MetLife reported third-quarter 2021 adjusted operating earnings of $2.39 per share, which surpassed the Zacks Consensus Estimate by 44%. The bottom line also improved 38.2% over year. Results were aided by solid contributions from EMEA, Asia, MetLife Holdings.
Behind the Headlines
MetLife’s adjusted operating revenues of $17 billion improved 3.5% year over year on account of a rise in net investment income. The top line missed the Zacks Consensus Estimate by 4.3%.
Adjusted premiums, fees and other revenues excluding pension risk transfer (PRT) rose 1% year over year to $11.4 billion in the quarter under review.
Adjusted net investment income of $5.7 billion rose 21% year over year, courtesy of growth in variable investment income resulting from improved private equity returns.
Total expenses dipped 1.5% year over year to $14.8 billion in the third quarter.
Adjusted expense ratio excluding total notable items related to other expenses and PRT expanded 60 basis points (bps) year over year to 18.7%.
Adjusted book value per share of $77.24 climbed 1% year over year. Adjusted return on equity excluding AOCI other than FCTA expanded 380 bps year over year to 17% in the quarter under review.
Segmental Performances
U.S.
Adjusted earnings in this segment dipped 1% year over year to $895 million due to unfavorable group life underwriting. However, the same was partly offset by a better variable investment income. Adjusted premiums, fees and other revenues amounted to $6.4 billion at the segment, which declined 6% year over year.
Asia
Adjusted earnings of $569 million increased 22% on a year-over-year basis. On a constant currency (cc) basis, adjusted earnings increased 22% year over year, courtesy of an uptick in variable investment income and growing volumes. Adjusted premiums, fees & other revenues were down 8% year over year to $2.1 billion in the quarter under review.
Latin America
Adjusted earnings in the segment totaled $29 million, which declined 26% year over year. Adjusted earnings at cc dropped 29% year over year due to increased COVID-19 related claims, partly offset by an improved variable investment income. Adjusted premiums, fees & other revenues of $988 million surged 30% year over year in the segment.
EMEA
Adjusted earnings from EMEA soared 81% year over year to $94 million. At cc, adjusted earnings surged 81% year over year owing to smaller negative impact in the current-year period from the annual actuarial assumption review, better volumes and favorable underwriting. Adjusted premiums, fees & other revenues of $670 million dipped 1% year over year.
MetLife Holdings
Adjusted earnings from MetLife Holdings amounted to $606 million, which increased 140% from the prior-year quarter’s level. The improvement came on the back of a smaller negative impact in the current-year period from the annual actuarial assumption review and an improved variable investment income. Adjusted premiums, fees & other revenues of $1.1 billion decreased 5% year over year in the third quarter.
Corporate & Other
Adjusted loss of $131 million was flat year over year.
Financial Update
Total shareholders’ equity as of Sep 30, 2021 was $69 billion, down 5.8% from the year-ago period’s reported figure.
Share Repurchase Update
The company bought back shares worth $1 billion in the quarter under review.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, MetLife has a subpar Growth Score of D, 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
MetLife has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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MetLife (MET) Down 7.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for MetLife (MET - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is MetLife due for a breakout? 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's Q3 Earnings Beat Estimates, Improve Y/Y
MetLife reported third-quarter 2021 adjusted operating earnings of $2.39 per share, which surpassed the Zacks Consensus Estimate by 44%. The bottom line also improved 38.2% over year. Results were aided by solid contributions from EMEA, Asia, MetLife Holdings.
Behind the Headlines
MetLife’s adjusted operating revenues of $17 billion improved 3.5% year over year on account of a rise in net investment income. The top line missed the Zacks Consensus Estimate by 4.3%.
Adjusted premiums, fees and other revenues excluding pension risk transfer (PRT) rose 1% year over year to $11.4 billion in the quarter under review.
Adjusted net investment income of $5.7 billion rose 21% year over year, courtesy of growth in variable investment income resulting from improved private equity returns.
Total expenses dipped 1.5% year over year to $14.8 billion in the third quarter.
Adjusted expense ratio excluding total notable items related to other expenses and PRT expanded 60 basis points (bps) year over year to 18.7%.
Adjusted book value per share of $77.24 climbed 1% year over year. Adjusted return on equity excluding AOCI other than FCTA expanded 380 bps year over year to 17% in the quarter under review.
Segmental Performances
U.S.
Adjusted earnings in this segment dipped 1% year over year to $895 million due to unfavorable group life underwriting. However, the same was partly offset by a better variable investment income. Adjusted premiums, fees and other revenues amounted to $6.4 billion at the segment, which declined 6% year over year.
Asia
Adjusted earnings of $569 million increased 22% on a year-over-year basis. On a constant currency (cc) basis, adjusted earnings increased 22% year over year, courtesy of an uptick in variable investment income and growing volumes. Adjusted premiums, fees & other revenues were down 8% year over year to $2.1 billion in the quarter under review.
Latin America
Adjusted earnings in the segment totaled $29 million, which declined 26% year over year. Adjusted earnings at cc dropped 29% year over year due to increased COVID-19 related claims, partly offset by an improved variable investment income. Adjusted premiums, fees & other revenues of $988 million surged 30% year over year in the segment.
EMEA
Adjusted earnings from EMEA soared 81% year over year to $94 million. At cc, adjusted earnings surged 81% year over year owing to smaller negative impact in the current-year period from the annual actuarial assumption review, better volumes and favorable underwriting. Adjusted premiums, fees & other revenues of $670 million dipped 1% year over year.
MetLife Holdings
Adjusted earnings from MetLife Holdings amounted to $606 million, which increased 140% from the prior-year quarter’s level. The improvement came on the back of a smaller negative impact in the current-year period from the annual actuarial assumption review and an improved variable investment income. Adjusted premiums, fees & other revenues of $1.1 billion decreased 5% year over year in the third quarter.
Corporate & Other
Adjusted loss of $131 million was flat year over year.
Financial Update
Total shareholders’ equity as of Sep 30, 2021 was $69 billion, down 5.8% from the year-ago period’s reported figure.
Share Repurchase Update
The company bought back shares worth $1 billion in the quarter under review.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, MetLife has a subpar Growth Score of D, 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
MetLife has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.