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MetLife (MET) Q3 Earnings Top Estimates on Volume Growth
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MetLife, Inc.’s (MET - Free Report) third-quarter 2018 operating earnings of $1.38 per share beat the Zacks Consensus Estimate of $1.25 by 10.4%. The bottom line also surged 33% year over year.
The reported quarter witnessed volume growth, favorable underwriting, expense management and an improved investment income.
Behind the Headlines
The company generated operating revenues of $16.4 billion, down 2% year over year. However, the top line beat the Zacks Consensus Estimate by 1.7%.
Adjusted premiums, fees & other revenues of $11.9 billion decreased 5% year over year. Net investment income of $4.5 billion increased 4%.
Total expenses of $15.7 million were up 3.1% year over year on higher interest expense on debt.
Quarterly Segment Details
U.S.
Adjusted earnings in this segment soared 47% year over year to $795 million, driven by the U.S. tax reform, a favorable underwriting as well as volume growth. All three divisions, namely- Group Benefits, Retirement and Income Solutions as well as Property & Casualty delivered sturdy results.
Adjusted premiums, fees & other revenues were $6.9 billion, down 7%, attributable to lower pension risk transfer transactions in Retirement and Income Solutions.
Asia
Operating earnings of $266 million were down 15% (14% on constant currency basis) year over year as annual actuarial assumption review offset the favorable impact of volume growth.
Adjusted premiums, fees & other revenues were $2.1 billion, down 2% on reported basis and 1% at constant currency.
Latin America
Operating earnings were $170 million, up 4% (13% at constant currency) year over year, aided by volume growth, favorable underwriting and the annual actuarial assumption review. However, the negative impact of U.S. tax reform was a partial offset.
Adjusted premiums, fees & other revenues were $928 million, down 1% on reported basis while up 7% at constant currency, fueled by growth across the region.
EMEA
Operating earnings from EMEA decreased 23% (17% on constant currency basis) year over year to $55 million, attributable to annual actuarial assumption review.
Adjusted premiums, fees & other revenues were $634 million, flat year over year but up 3% at constant currency.
MetLife Holdings
Operating earnings from MetLife Holdings came in at $327 million, down 10% year over year, attributable to annual actuarial assumption review and other insurance adjustments, partially offset by the favorable impact of U.S. tax reform.
Operating premiums, fees & other revenues were $1.3 billion, down 5% year over year.
Corporate & Other
Corporate & other incurred an operating loss of $237 million, narrower than $336 million loss in the prior-year quarter.
Financial Update
Variable investment income increased to $221 million from $153 million in the year-ago quarter, driven by higher private equity and prepayment income.
Book value per share declined 6% year over year to $48.94 as of Sep 30, 2018.
Adjusted tangible return on equity expanded 380 basis points to 12.9%.
Among other Multi Line insurers having reported third-quarter earnings so far, the bottom line of MGIC Investment Corporation (MTG - Free Report) , Radian Group Inc. (RDN - Free Report) and CNO Financial Group (CNO - Free Report) beat the respective third-quarter estimates.
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MetLife (MET) Q3 Earnings Top Estimates on Volume Growth
MetLife, Inc.’s (MET - Free Report) third-quarter 2018 operating earnings of $1.38 per share beat the Zacks Consensus Estimate of $1.25 by 10.4%. The bottom line also surged 33% year over year.
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. Price, Consensus and EPS Surprise | MetLife, Inc. Quote
The reported quarter witnessed volume growth, favorable underwriting, expense management and an improved investment income.
Behind the Headlines
The company generated operating revenues of $16.4 billion, down 2% year over year. However, the top line beat the Zacks Consensus Estimate by 1.7%.
Adjusted premiums, fees & other revenues of $11.9 billion decreased 5% year over year. Net investment income of $4.5 billion increased 4%.
Total expenses of $15.7 million were up 3.1% year over year on higher interest expense on debt.
Quarterly Segment Details
U.S.
Adjusted earnings in this segment soared 47% year over year to $795 million, driven by the U.S. tax reform, a favorable underwriting as well as volume growth. All three divisions, namely- Group Benefits, Retirement and Income Solutions as well as Property & Casualty delivered sturdy results.
Adjusted premiums, fees & other revenues were $6.9 billion, down 7%, attributable to lower pension risk transfer transactions in Retirement and Income Solutions.
Asia
Operating earnings of $266 million were down 15% (14% on constant currency basis) year over year as annual actuarial assumption review offset the favorable impact of volume growth.
Adjusted premiums, fees & other revenues were $2.1 billion, down 2% on reported basis and 1% at constant currency.
Latin America
Operating earnings were $170 million, up 4% (13% at constant currency) year over year, aided by volume growth, favorable underwriting and the annual actuarial assumption review. However, the negative impact of U.S. tax reform was a partial offset.
Adjusted premiums, fees & other revenues were $928 million, down 1% on reported basis while up 7% at constant currency, fueled by growth across the region.
EMEA
Operating earnings from EMEA decreased 23% (17% on constant currency basis) year over year to $55 million, attributable to annual actuarial assumption review.
Adjusted premiums, fees & other revenues were $634 million, flat year over year but up 3% at constant currency.
MetLife Holdings
Operating earnings from MetLife Holdings came in at $327 million, down 10% year over year, attributable to annual actuarial assumption review and other insurance adjustments, partially offset by the favorable impact of U.S. tax reform.
Operating premiums, fees & other revenues were $1.3 billion, down 5% year over year.
Corporate & Other
Corporate & other incurred an operating loss of $237 million, narrower than $336 million loss in the prior-year quarter.
Financial Update
Variable investment income increased to $221 million from $153 million in the year-ago quarter, driven by higher private equity and prepayment income.
Book value per share declined 6% year over year to $48.94 as of Sep 30, 2018.
Adjusted tangible return on equity expanded 380 basis points to 12.9%.
Zacks Rank
MetLife has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other Multi Line insurers having reported third-quarter earnings so far, the bottom line of MGIC Investment Corporation (MTG - Free Report) , Radian Group Inc. (RDN - Free Report) and CNO Financial Group (CNO - Free Report) beat the respective third-quarter estimates.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>