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MetLife's (MET) Q1 Earnings Beat on Strong Latin America Unit

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MetLife, Inc. (MET - Free Report) reported first-quarter 2022 adjusted operating earnings of $2.08 per share, which outpaced the Zacks Consensus Estimate by 27.6%. However, the bottom line declined 5% year over year.

MET’s quarterly results gained on the back of higher premiums, fees and other revenues, solid contributions from the Latin America segment and reduced expenses. However, the upside was partly offset by lower net investment income.

MetLife, Inc. Price, Consensus and EPS Surprise

MetLife, Inc. Price, Consensus and EPS Surprise

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

Behind the Headlines

Adjusted operating revenues of MetLife amounted to $17.7 billion, which improved 6.1% year over year in the first quarter. The top line surpassed the consensus mark by 3.5%.

Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT), were $11.5 billion, which inched up 1% year over year.

Adjusted net investment income fell 6% year over year to $5 billion in the quarter under review, primarily due to reduced variable investment income.

Total expenses of $15 billion decreased 1.5% year over year due to lower interest credited to policyholder account balances, policyholder dividends, interest expense on debt and other expenses.

Adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, deteriorated 20 basis points (bps) year over year to 19.2%.

Book value per share, excluding accumulated other comprehensive income (AOCI) other than foreign currency translation adjustments (FCTA), increased 7% year over year to $57.12 during the first quarter.

Adjusted return on equity, excluding AOCI other than FCTA, deteriorated 180 bps year over year to 14.7%.

Segmental Performances

U.S.

The segment reported adjusted earnings of $693 million, which plunged 12% year over year in the first quarter due to reduced variable investment income. Nevertheless, the downside was partly offset by lower COVID-19 life insurance claims and favorable volume growth.

Adjusted premiums, fees and other revenues of $7.9 billion climbed 23% year over year on the back of improved pension risk transfer sales and robust growth within Group Benefits.

Asia

Adjusted earnings in the segment amounted to $580 million, which fell 7% year over year in the quarter under review.

On a constant currency (cc) basis, adjusted earnings slipped 4% year over year due to reduced recurring interest margins and less favorable equity markets.

Adjusted premiums, fees & other revenues declined 6% year over year to $2 billion in the first quarter, while the same inched up 1% year over year on a cc basis.

Latin America

Adjusted earnings of $142 million increased nearly four-fold year over year.

Adjusted earnings at cc increased nearly five-fold on a year-over-year basis. The substantial improvement stemmed from lower COVID-19 linked claims and favorable volume growth.

Adjusted premiums, fees & other revenues advanced 18% or 22% on a cc basis year over year to $1 billion in the segment.

EMEA

The segment’s adjusted earnings were $52 million, which plunged 27% year over year in the first quarter. At cc, adjusted earnings fell 15% year over year due to the exclusion of divested businesses in the current year and escalating expenses.

Adjusted premiums, fees & other revenues of $606 million declined 11% year over year, while the same on a cc basis slid 4% year over year.

MetLife Holdings

Adjusted earnings in the segment slumped 39% year over year to $377 million resulting from reduced variable investment income and less favorable underwriting.

Adjusted premiums, fees & other revenues fell 6% year over year to $1.1 billion in the quarter under review.

Corporate & Other

Adjusted loss of $117 million came in narrower than the prior-year quarter’s loss of $171 million.

Financial Update (as of Mar 31, 2022)

MetLife exited the first quarter with cash and cash equivalents of $23.5 billion, which increased 19.6% year over year. Total assets of $724.3 billion declined 5.9% year over year.

Long-term debt totaled $13.8 billion, down 4.6% year over year.

Shareholders’ equity of $54 billion decreased 18.1% year over year.

Capital Deployment Update

MetLife bought back shares worth $915 million during the first quarter.

Concurrent with the first-quarter results, the board of directors authorized a share repurchase program worth $3 billion. The new $3-billion is an addition to the remaining $475 million under the company’s prior authorization unveiled in August 2021.

In April 2022, the company’s board of directors approved a 4.2% hike in its quarterly dividend. The increased dividend amounting to 50 cents per share will be paid on Jun 14, 2022, to shareholders of record as of May 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 Some Other Multiline Insurers

Of the multiline insurance industry players that have reported first-quarter results so far, the bottom line of The Hartford Financial Services Group, Inc. (HIG - Free Report) , American International Group, Inc. (AIG - Free Report) and MGIC Investment Corporation (MTG - Free Report) beat the Zacks Consensus Estimate.

Hartford Financial reported first-quarter 2022 adjusted operating earnings of $1.66 per share, which beat the Zacks Consensus Estimate by 6.4%. The bottom line increased to nearly three-fold year over year. HIG’s operating revenues amounted to $3.6 billion, which improved 7.2% year over year in the first quarter. However, the top line missed the consensus mark by 1.6%. Total benefits and expenses of Hartford Financial decreased nearly 3% year over year to $4.9 billion in the quarter under review.

American International reported first-quarter 2022 adjusted operating earnings of $1.30 per share, which beat the Zacks Consensus Estimate by 4.8%. AIG’s bottom line climbed 23.8% year over year. Total operating revenues of American International amounted to $11 billion, which improved 3.5% year over year in the first quarter. However, the top line missed the consensus mark by 1.6%. Total net investment income of $3.2 billion declined 11% year over year in the quarter under review.

MGIC Investment reported first-quarter 2022 operating net income per share of 60 cents, which beat the Zacks Consensus Estimate by 3.4%. The reported figure increased 42.8% year over year. MGIC Investment recorded total operating revenues of $294.6 million, which decreased 1.1% year over year. Insurance in force of MTG increased 10.2% from the prior-year quarter to $277.3 billion.