Back to top

Image: Bigstock

MetLife (MET) to Post Q4 Earnings: What's in the Offing?

Read MoreHide Full Article

MetLife, Inc. (MET - Free Report) is set to release fourth-quarter and full-year 2019 earnings on Feb 5.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 9.93% due to increase in expenses, which offset revenue growth.

Factors at Play

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings is pegged at $1.40 per share, indicating an upside of 3.7% from the year-ago reported figure.

The consensus mark for revenues suggests an upside of 8.4% from the year-earlier reported number.

Within the U.S. business segment, strong growth in voluntary products is likely to have aided Group Benefits premium. The company’s brand name, product sets, customer base and distribution reach might have driven sales of voluntary products. Per the Zacks Consensus Estimate, premium in the Group Benefits business is pegged at $4.14 billion, indicating 4.8% increase from the year-ago quarter reported figure.

Within the Retirement and Income Solutions segment, premium growth is expected to have been driven by higher pension risk transfer transactions.

This increase might have been partially offset by weaker investment margin. Per the Zacks Consensus Estimate, premium in the Retirement and Income Solutions subsegment is pegged at $1 billion, indicating an increase of 168% from the year-ago quarter reported figure.

The company’s Asia business is likely to have witnessed sales growth in Korea, China and India. However, impact of the divested business in Hong Kong and a large group case in Australia might have been a drag on overall sales. Per the Zacks Consensus Estimate, premium in the Asia business is pegged at $1.64 billion, indicating a decline of 2% from the year-ago quarter reported figure.

The company’s Latin America business is likely to have witnessed an increase in adjusted earnings year over year due to strong Chilean encaje returns and good volume growth. Latin America sales are expected to have gained on higher sales in Chile, Mexico and Brazil. Per the Zacks Consensus Estimate, premium in the Latin America business is pegged at $695 million, indicating an increase of 2.1% from the year-ago quarter reported figure.

In the EMEA business, strong sales are likely to be seen across the region. Per the Zacks Consensus Estimate, premium in the EMEA business is pegged at $536 million, indicating an increase of 3.1% from the year-ago quarter reported figure.

Net investment income is likely to have suffered from the impact of falling interest rates on recurring investment margins and the strengthening of the U.S. dollar during the fourth quarter.

Share repurchases made by MetLife in the to-be-reported quarter is likely to have benefited its bottom line.

Earnings Surprise History

The company boasts an attractive earnings surprise history. It beat estimates in three of the last four quarters with a positive surprise of 3.28%, on average. This is depicted in the chart below:

MetLife, Inc. Price and EPS Surprise

Here is what our quantitative model predicts:

Our proven model predicts 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 an earnings beat. 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 +0.57%.

Zacks Rank: MetLife currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Some other stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Cincinnati Financial Corporation (CINF - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank of 3.

Lincoln National Corporation (LNC - Free Report) has an Earnings ESP of +0.54% and a Zacks Rank of 2.

Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank of 3.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.7% per year. So be sure to give these hand-picked 7 your immediate attention.

See 7 handpicked stocks now >>