MetLife Inc. ( MET ) reported
first-quarter 2013 operating earnings per share (EPS) of $1.48,
modestly beating both the Zacks Consensus Estimate of $1.30 and the
year-ago quarter's EPS of $1.37. Operating earnings improved 12%
year over year to $1.64 billion.
Including extraordinary items, GAAP net income spiked to $956
million or 87 cents per share against a net loss of $174 million or
16 cents per share in the prior-year quarter.
Results reflected growth across MetLife's operating regions
along with expense control that also drove the return on equity
(ROE) and book value per share. These were partially offset by
higher derivative losses driven by the unfavourable impact of
foreign exchange rates and low interest rate.
During the reported quarter, MetLife's total operating expenses
inched up 0.7% year over year to $14.66 billion, whereas total
expenses also climbed 0.7% year over year to $16.44 billion.
Total operating revenue for the reported quarter climbed 2% year
over year to $16.98 billion and slivered past the Zacks Consensus
Estimate of $16.73 billion. Moreover, total revenue jumped 11.1%
year over year to $17.7 billion. MetLife's premiums climbed 0.5%
year over year to $9.15 billion, whereas fee revenue improved 10.1%
to $2.21 billion and net investment income was up 1.1% year over
year to $5.13 billion. Other revenues also grew 6.4% year over year
to $481 million.
The Americas' operating earnings
jumped 12% year over year to $1.3 billion. Premiums, fees and other
revenues climbed 4% to $8.6 billion, while excluding pension
close-out sales it improved 5%. Operating revenues grew 3.2% to
The segment witnessed improvements in Retail business, although
lower underwriting results weakened the Group, voluntary and
worksite benefits. Meanwhile, operating earnings in Latin America
dipped 3% year over year driven by lower investment income across
the region, partially offset by sales growth of 20%.
Operating earnings from Asia were up
11% year over year to $333 billion, while premiums, fees and other
revenues grew 2% to $2.5 billion, driven by sales in Australia and
Korea along with higher fee income, partially offset by the
consistent uncertainty in Japan. Operating revenue grew 2.9% to
Operating earnings from EMEA surged
21% year over year to $87 million. Premiums, fees and other
revenues in this segment decreased 11% to $685 million due to the
withdrawal from some businesses in UK. Operating revenues declined
12.1% to $813 million. However, total sales improved 13%,
reflecting augmented growth in Turkey, Russia and the Gulf
Separately, Corporate & Other
operating loss was recorded at $83 million, higher than the loss of
$67 million in the prior-year quarter.
At the end of the reported quarter, MetLife's net investment
income inched up 1% year over year to $5.1 billion, while net
investment portfolio gain was $161 million, better than a loss of
$145 million in the year-ago quarter. In addition, post-tax
derivative losses shrunk to $493 million from $1.3 billion in the
year-ago quarter. The losses were driven by volatility in interest
rate and foreign exchange.
Meanwhile, under the company's variable annuity hedging program,
pre-tax variable investment income was $337 million in the reported
quarter against $239 million in the year-ago period.
As of Mar 31, 2013, MetLife's book value per share, excluding
AOCI, grew 2% year over year at $47.37. However, reported book
value (including AOCI) per share rose 7% to $57.03. Operating ROE
stood at 12.7%, up from 11.3% at 2012-end.
At the end of Mar 2013, MetLife had total investments of $512.5
billion, up from $517.1 billion at 2012-end. As well, cash and cash
equivalents decreased to $10 billion, total assets increased to
$841.69 billion and long-term debt inched down to $18.72 billion,
while total equity edged up to $64.9 billion, from 2012-end.
On Apr 23, 2013, the board of MetLife hiked the quarterly
dividend per share by approximately 49% to 27.5 cents from the
prior 18.5 cents. This marks the 1 st dividend increment
since 2007, bringing the total annual dividend to $1.10 per
Accordingly, the hiked dividend will be paid on Jun 13, 2013 to
the shareholders of record as on May 9, 2013. From now, the company
will shift to a quarterly dividend payment structure against the
previous practice of annual dividend payouts.
Along with MetLife, its peers American International
Group Inc. ( AIG ), Cigna
Corp. ( CI )
and Prudential Financial Inc. ( PRU ) carry a Zacks
Rank #2 (Buy). AIG is slated to release its first-quarter results
after the closing bell on May 2, 2013.AMER INTL GRP (AIG): Free Stock Analysis ReportCIGNA CORP (CI): Free Stock Analysis ReportMETLIFE INC (MET): Free Stock Analysis ReportPRUDENTIAL FINL (PRU): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment