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MetLife (MET) Q2 Earnings Fall Shy of Estimates, Tumble Y/Y

Zacks Equity Research

MetLife, Inc.’s MET second-quarter 2020 operating earnings of 83 cents per share missed the Zacks Consensus Estimate by 13.5% and also declined 39.9% year over year.

The company’s results were negatively impacted by lower revenues.

Behind the Headlines

The company’s operating revenues of $13.8 billion were down 15.9% year over year and also missed the Zacks Consensus Estimate by 9.9%.

Adjusted premiums, fees & other revenues excluding pension risk transfer were down 8% year over year to $10.5 billion.

Net investment income (adjusted) of $3.4 billion was down 24% year over year due to loss in variable investment income.

Total expenses of $13.9 million were down 8.5% year over year.

Adjusted expense ratio of 20.6% was up 60 basis points year over year.

Adjusted book value per share was $52.27, up 11% year over year.

Adjusted return on equity was 6.4%, down 570 basis points year over year.

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

Quarterly Segment Details

United States

Adjusted earnings in this segment declined 29% year over year to $523 million due to lower variable investment income.

Adjusted premiums, fees & other revenues were $5.7 billion, down 15% year over year due to weak contributions from Group Benefits, Property & Casualty, and Retirement and Income Solution sub-segment.

Asia

Operating earnings of $256 million were down 29% year over year due to a decline in variable investment income. However, the same was partly offset by higher volume and expense margins.

Adjusted premiums, fees & other revenues were $2 billion, down 3% on constant-currency basis.

Latin America

Operating earnings of $132 million were down 17% year over year due to adverse foreign exchange rates.

Adjusted premiums, fees & other revenues were $737 million, down 31% due to soft annuity sales in Chile.

EMEA

Operating earnings from EMEA surged 51% year over year to $116 million, primarily driven by favourable underwriting and expense margins.

Adjusted premiums, fees & other revenues of $660 million inched up 2% year over year on constant-currency basis.

MetLife Holdings

Adjusted operating earnings from MetLife Holdings came in at $20 million, down 93% year over year due to lower variable investment income along with unfavourable underwriting margins.

Operating premiums, fees & other revenues were $1.2 billion, down 5% year over year.

Corporate & Other

The segment’s adjusted loss of $289 million in the second quarter was narrower than the adjusted loss of $307 million in the prior-year quarter.

Financial Update

As of Mar 31, 2020, shareholders’ equity was $64 billion, down 3.5% from the level at 2019 end.

Long-term debt as of the second-quarter end was $13.3 billion, down 0.9% from the level at 2019 end.

Cash and cash equivalents of $18 billion as of Mar 31, 2020 were up 11.1% from the level at 2019 end.

Zacks Rank & Peer Releases

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

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of Arch Capital Group Ltd. ACGL, Markel Corporation MKL and AXIS Capital Holdings Limited AXS beat the respective Zacks Consensus Estimate.

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