) reported fourth-quarter 2012 operating earnings per share (EPS)
of $1.25, modestly beating both the Zacks Consensus Estimate of
$1.18 and the year-ago quarter's EPS of $1.17. Operating earnings
improved 10% year over year to $1.37 billion.
During the reported quarter, operating EPS were negatively
affected by net derivative losses of $1.20, net investment losses
of 18 cents and other adjustments of 85 cents. These were
partially offset by an income tax benefit of $1.05 and income
from discontinued operations of 3 cents. Including these, GAAP
net income plummeted to $96 million or 9 cents per share against
$959 million or 90 cents per share in the prior-year quarter.
The upbeat results were primarily due to higher net investment
income, premiums and fees that drove the top line, return on
equity (ROE) and book value per share. These were partially
offset by higher-than-expected operating expenses and higher
derivative losses driven by the unfavorable impact of foreign
exchange rates and low interest rate.
During the reported quarter, MetLife's total operating
expenses increased 12.5% year over year to $16.39 billion,
whereas total expenses escalated 15.2% year over year to $17.81
Total operating revenue for the reported quarter increased 12%
year over year to $18.36 billion and also topped the Zacks
Consensus Estimate of $17.22 billion. Moreover, total revenue
climbed 3.6% year over year to $17.33 billion. MetLife's premiums
soared 15.7% year over year to $10.6 billion, whereas fee revenue
improved 14.6% to $2.16 billion and net investment income was up
5.8% year over year to $5.18 billion. Other revenues also grew
5.5% year over year to $443 million.
operating revenue increased 14.6% year over year to $14.1
Premiums, fees and other revenue jumped 18% to $9.9 billion,
while excluding pension close-out sales it improved 5%. Further,
operating earnings surged 22% year over year to $1.25
The segment witnessed improvements in all businesses except
the group, voluntary and worksite benefits along with favorable
claims experience. Particularly, Latin America posted operating
earnings growth of 20% year over year and total sales of 26%,
driven by improved growth channels across the region. The upsides
were partially offset by higher catastrophe losses of $70 million
due to Superstorm Sandy.
Operating revenue from
were up 11% year over year to $3.27 billion, while premiums, fees
and other revenue grew 11% to $2.5 billion, driven by sales in
Australia and Korea along with improved persistency in Japan as
well as high investment income. However, operating earnings
decreased 23.6% year over year to $198 million due to the
negative impact of the annual review of actuarial
Operating revenue from
was almost flat year over year at $807 million. Premiums, fees
and other revenue in this segment slipped 3% to $678 million.
However, operating earnings improved 25.5% year over year to $59
million, reflecting augmented growth in Turkey, Russia and the
Gulf countries. However, growth remained sluggish in the Western
Corporate & Other
operating revenue was recorded at $213 million, down 20% from the
year-ago period. Additionally, this segment incurred an operating
loss of $137 million, higher than the loss of $95 million in the
Full-Year 2012 Highlights
For full-year 2012, MetLife's operating EPS stood at $5.28,
exceeding both the Zacks Consensus Estimate of $5.21 and $4.38
recorded in 2011. Operating net income escalated 21.6% year over
year to $5.69 billion. On a GAAP basis, including losses from
derivatives, investments, goodwill impairment and other
adjustments, net income plunged to $1.20 billion or $1.12 per
share in 2012 from $6.16 billion or $5.76 per share in 2011.
Operating revenues of $68.35 billion climbed 5% over 2011,
lagging the Zacks Consensus Estimate of $66.72 billion. However,
total revenues dipped 3% to $68.15 billion. Total operating
expenses inched up 3.1% year over year to $60.22 billion, while
total expenses increased 9.3% year over year to $66.71
At the end of the reported quarter, MetLife's net investment
income increased 6% year over year to $5.2 billion, while net
investment portfolio loss was $2 million, down from loss of $213
million in the year-ago quarter. In addition, post-tax derivative
losses surged to $924 million ($1.3 billion pre-tax), in stark
contrast to a gain of $351 million ($591 million pre-tax) in the
year-ago quarter. The downside was driven by volatility in
interest rate and foreign exchange.
Meanwhile, under the company's variable annuity hedging
program, pre-tax variable investment income was $376 million in
the reported quarter against $135 million in the year-ago
As of Dec 31, 2012, MetLife's book value per share, excluding
AOCI, was almost flat year over year at $46.73. However, reported
book value (including AOCI) per share grew 9% to $57.17 versus
$52.43 at the end of 2011. Operating ROE stood at 11.3% at
At the end of 2012, MetLife had total investments of $517.1
billion, up from $511.4 billion at 2011-end. Also, cash and cash
equivalents surged to $15.7 billion, total assets increased to
$836.8 billion and long-term debt inched down to $19.1 billion,
while total equity increased to $64.8 billion, from 2011-end.
MetLife carries a Zacks Rank #3 (Hold). Other strong
performers in the insurance sector include
XL Group Plc
First American Financial Corp.
), all of which carry a Zacks Rank #1 (Strong Buy).
FIRST AMER FINL (FAF): Free Stock Analysis
METLIFE INC (MET): Free Stock Analysis Report
RLI CORP (RLI): Free Stock Analysis Report
XL GROUP PLC (XL): Free Stock Analysis Report
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