) reported second-quarter 2013 operating earnings per share (EPS)
of $1.44, comfortably exceeding both the Zacks Consensus Estimate
of $1.33 and the year-ago quarter's EPS of $1.34. Operating
earnings improved 11% year over year to $1.59 billion.
However, including extraordinary items, however, GAAP net
income plunged to $471 million or 87 cents per share against
$2.26 billion or $2.12 per share in the prior-year quarter.
Results reflected growth across the Americas and Asia along
with expense control. These were partially offset by weakness in
EMEA and higher derivative losses driven by the unfavourable
impact of foreign exchange rates and low interest rate. The
downsides also weighed on the return on equity (ROE) and book
value per share.
During the reported quarter, MetLife's total operating
expenses inched down 0.7% year over year to $14.8 billion,
whereas total expenses also dipped 0.7% year over year to $15.16
Total operating revenue for the reported quarter climbed 2%
year over year to $17.04 billion, although it missed the Zacks
Consensus Estimate of $17.06 billion. However, total revenue
plummeted 14.6% year over year to $15.72 billion, primarily due
to higher derivative losses. MetLife's premiums inched up 2% year
over year to $9.16 billion and fee revenue improved 14.1% to
$2.28 billion, while net investment income dipped 1.3% year over
year to $5.1 billion. Other revenues also grew 17.4% year over
year to $500 million.
operating earnings jumped 18% year over year to $1.33
Premiums, fees and other revenues climbed 4% to $8.7 billion,
while excluding pension closeout sales it improved 5%. Operating
revenues grew 4% to $12.92 billion.
The segment witnessed improvements in Group, voluntary and
worksite benefits and Retail business, although variable annuity
sales declined 40% over the prior-year quarter. Meanwhile,
operating earnings in Latin America dipped 7% year over year due
to lower investment income across the region, partially offset by
sales growth of 32%.
Operating earnings from
were up 18.3% year over year to $330 billion, while premiums,
fees and other revenues grew 2% to $2.5 billion, driven by growth
in Japan, China and India. Operating revenues were flat at $3.17
Operating earnings from
declined 12.8% year over year to $68 million. Premiums, fees and
other revenues in this segment decreased 5% to $688 million due
to the withdrawal from some businesses in UK. Operating revenues
slid 5.2% to $808 million. However, total sales improved 10%,
reflecting augmented growth in Russia and the Gulf countries.
Corporate & Other
operating loss was recorded at $136 million, wider than the loss
of $53 million in the prior-year quarter. Total revenue stood at
$146 million, down 50.7% from prior-year quarter due to low
Investment & Financial Update
At the end of the reported quarter, MetLife's net investment
income remained flat year over year at $5.1 billion, while net
investment portfolio gain was $107 million, higher than $4
million in the year-ago quarter. In addition, pre-tax derivative
losses inflated to $1.69 billion against gains of $2.09 billion
in the year-ago quarter. Volatility in interest rate and foreign
exchange led to the losses.
Meanwhile, under the company's variable annuity hedging
program, pre-tax variable investment income was $312 million in
the reported quarter against $371 million in the year-ago
As of Jun 30, 2013, MetLife's book value per share, excluding
AOCI, fell 7% year over year at $52.85. Moreover, reported book
value (including AOCI) per share dipped 2% to $47.20. Operating
ROE stood at 10.6%, down from 11.3% at 2012-end.
At the end of Jun 2013, MetLife had total investments of
$491.2 billion, down from $517.1 billion at 2012-end. Total
assets increased to $815.66 billion and long-term debt inched
down to $18.58 billion, whereas cash and cash equivalents
decreased to $9.2 billion and total equity decreased to $60.4
billion, from 2012-end.
On Jun 25, 2013, the board announced a quarterly dividend of
27.5 cents per share, payable on Sep 13, 2013, to the
shareholders of record as on Aug 9, 2013.
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
dividend increment since 2007, bringing the total annual dividend
to $1.10 per share.
The hiked dividend was paid on Jun 13, 2013 to the
shareholders of record as on May 9, 2013. The company has shifted
to a quarterly dividend payment structure from the previous
practice of annual dividend payouts.
Along with MetLife, its peers
Assured Guaranty Ltd.
FBL Financial Group Inc.
) carry a Zacks Rank #2 (Buy).
ASSURED GUARNTY (AGO): Free Stock Analysis
CIGNA CORP (CI): Free Stock Analysis Report
FBL FINL GRP-A (FFG): Free Stock Analysis
METLIFE INC (MET): Free Stock Analysis Report
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