A month has gone by since the last earnings report for MetLife, Inc.MET . Shares have added about 2.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MET due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
MetLife Q1 Earnings Top Estimates, Revenues Rise Y/Y
MetLife, Inc.'s first-quarter 2018 operating earnings of $1.36 per share beat the Zacks Consensus Estimate of $1.17 by 16.2%. However, the bottom line declined nearly 7% year over year.
The reported quarter benefited from favorable underwriting, volume growth and a favorable positive impact of the tax reform.
The company generated operating revenues of $15.148 billion, up 1% year over year. However, the top line missed the Zacks Consensus Estimate by 3.4%.
Total expenses of $13.15 million declined 5.35% year over year.
Quarterly Segment Details
Adjusted earnings in this segment surged 31% year over year to $653 million, attributable to the impact of U.S. tax reform. Adjusted operating premiums, fees & other revenues came in at $5.7 billion, declining 1% year over year.
Operating earnings of $327 million were up 11% year over year on reported basis, and up 7% on constant currency basis, fueled by volume growth. Operating premiums, fees & other revenues in Asia were up 4% (down 1% on a constant currency basis) to $2.2 billion, driven by transition to fee-based products.
Operating earnings were $140 million, down 2% (down 11% at constant currency) year over year. This downside was due to the negative impact of U.S. tax reform as well as a one-time tax item in Chile. Operating premiums, fees & other revenues were $989 million, up 8% on reported and 2% on constant currency basis.
Operating earnings from EMEA increased 8% (down 5% on constant currency basis) year over year to $81 million. Operating premiums, fees & other revenues were $679 million, up 11% reportedly and 2%, on constant currency basis.
Operating earnings from MetLife Holdings came in at $425 million, up 10% year over year, attributable to U.S. tax reform. Operating premiums, fees & other revenues were $1.3 billion, down 12%, primarily due to Brighthouse separation-related impacts.
Corporate & Other
Corporate & other incurred an operating loss of $203 million, wider than $76 million loss in the prior-year quarter due to the negative impact of U.S. tax reform.
Variable investment income increased to $212 million from $177 million in the year-ago quarter, driven by lower hedge fund income.
Book value per share decreased 14% year over year to $52.49 as of Mar 31, 2018.
Adjusted tangible return on equity expanded 470 basis points to 16.4%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate have trended downward during the past month. There has been one revision higher for the current quarter compared to two lower.
MetLife, Inc. Price and Consensus
At this time, MET has a poor Growth Score of F, however its Momentum is doing a lot better with an A. Following the exact same course, the stock was also allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, MET has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.