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MetLife's (MET) Q1 Earnings Top Estimates, Revenues Lag

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MetLife, Inc.’s (MET - Free Report) first-quarter 2020 operating earnings of $1.58 per share beat the Zacks Consensus Estimate by 8.97% and also improved 6.7% year over year.

Behind the Headlines

Though the company’s operating revenues of $15.5 billion were up 1% year over year,  the same missed the Zacks Consensus Estimate by 7%.
Adjusted premiums, fees & other revenues excluding pension risk transfer were up marginally 0.4% year over year to $11.2 billion.

Net investment income (adjusted) of $4.3 billion was up 1% year over year, driven by higher private equity income.

Total adjusted expenses of $13.7 million were up 0.6% year over year.
Adjusted expense ratio of 19.7% was down 80 basis points year over year.

Adjusted book value per share was $52.36, up 15% year over year.
Adjusted return on equity was 12.6%, down 110 basis points year over year.

MetLife Inc Price, Consensus and EPS Surprise

Quarterly Segment Details

United States

Adjusted earnings in this segment increased 8% year over year to $780 million on higher contribution in Retirement and Income Solutions, and Property and Casualty, partly offset by lower underwriting margins in the Group Benefits sub-segment.

Adjusted premiums, fees & other revenues were $6.2 billion, up 2% year over year owing to higher premiums in Group Benefits, and Property and Casualty sub-segments, partly offset by lower premiums in Retirement and Income Solution sub-segment.


Operating earnings of $351 million stayed flat year over year, attributable to volume growth, which in turn, was offset by less favorable underwriting, unfavorable equity markets and soft investment margins.

Adjusted premiums, fees & other revenues were $2.1 billion, down 2% on constant-currency basis.

Latin America

Operating earnings of $95 million were down 19% year over year due to lower equity returns, which impacted the Chilean encaje returns. Adjusted premiums, fees & other revenues were $921 million, up 8% on improved sales in Chile, Mexico and Brazil.

Operating earnings from EMEA decreased 6% year over year to $78 million, primarily due to lower equity markets and unfavorable underwriting.
Adjusted premiums, fees & other revenues of $697 million were up 8% year over year on constant-currency basis on the back of higher sales.

MetLife Holdings

Adjusted operating earnings from MetLife Holdings came in at $277 million, down 13% year over year.

Operating premiums, fees & other revenues were $1.2 billion, down 3% year over year.

Financial Update

As of Mar 31, 2020, shareholders’ equity was $65.9 billion, up 19.4% year over year.

Long-term debt as of the first-quarter end was $14.5 billion, up 7.4% sequentially.

Cash and cash equivalents of $24.1 billion as of Mar 31, 2020, were up 45.2% sequentially.

Zacks Rank & Peer Releases

MetLife currently has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players in the insurance space that already reported first-quarter earnings, the bottom-line results of Principal Financial Group (PFG - Free Report) , The Progressive Corp. (PGR - Free Report) and The Travelers Companies (TRV - Free Report) missed the respective Zacks Consensus Estimate by 3.36%, 19.3% and 9.03%.

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