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MetLife's (MET) Q3 Earnings Beat Estimates, Improve Y/Y

Zacks Equity Research
·4-min read

MetLife, Inc. MET 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.

MetLife, Inc. Price, Consensus and EPS Surprise

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

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 owing to lower interest credited to policyholder account balances, policyholder dividends, Amortization of DAC and VOBA and other expenses.

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.

Zacks Rank

MetLife presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Multiline Insurers

Of the multiline insurance industry players that have reported third-quarter results so far, the bottom-line results of Old Republic International Corporation ORI, Assurant, Inc. AIZ and CNO Financial Group, Inc. CNO beat the respective Zacks Consensus Estimate.


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