Tags: MetLife | Profit | Double

MetLife's Profit More Than Doubles

Wednesday, 29 October 2014 06:32 PM

MetLife Inc., the largest U.S. life insurer, said third-quarter profit more than doubled on growth in its home market, fueled by investment results.

Net income rose to $2.09 billion from $972 million a year earlier, the New York-based insurer said Wednesday in a statement. Operating earnings, which exclude some investing results, were $1.60 a share, beating the $1.38 average estimate of 17 analysts surveyed by Bloomberg.

Chief Executive Officer Steve Kandarian, 62, has been expanding with deals in Chile, Vietnam, and Malaysia. In the U.S., the company has cut jobs and scaled back in some capital-intensive businesses such as variable annuities while seeking to build direct-to-consumer sales and an asset-management operation.

“For all their talk about getting growth in less-developed markets, their biggest presence is still in the U.S.,” Cathy Seifert, an equity analyst at Standard & Poor’s Capital IQ, said by phone before results were announced. “As labor force participation increases, demand for many of the products should increase.”

MetLife sjares advanced 2 percent to $53.35 in extended trading at 4:24 p.m. in New York. The stock had declined 3 percent this year, compared with the 7.3 percent gain of the Standard & Poor’s 500 Index. Results were released after the close of regular trading.

Group Insurance

In the Americas unit led by Bill Wheeler, operating profit rose 14 percent to $1.5 billion, as fee income increased and underwriting results improved on group insurance products. The Latin America operation contributed $152 million, up from $133 million a year earlier, fueled by the acquisition of Chilean pension-provider AFP Provida SA in September 2013.

MetLife said costs tied to tax reform in Chile were $41 million. Principal Financial Group Inc. last week recorded costs of $58.1 million tied to tax changes in the country, where it owns pension provider AFP Cuprum SA.

Prudential Financial Inc. on Tuesday announced a deal to acquire a minority stake in Chilean retirement firm Administradora de Fondos de Pensiones Habitat SA.

MetLife’s sales of variable annuities declined to $1.53 billion from $2.69 billion a year earlier. Fixed- and indexed- annuity sales climbed to $505 million from $188 million, the insurer said in a document on its website.

Net investment income rose 7.6 percent to $5.41 billion. Variable investments, which include private-equity and hedge funds, added $424 million before taxes, compared with $236 million a year earlier.

Currencies, Rates

Derivatives added $478 million to earnings before taxes, fueled by changes in currencies and interest rates. A year earlier, MetLife posted net derivative losses of $546 million.

Book value, a measure of assets minus liabilities, rose to $61.44 per share on Sept. 30 from $59.96 three months earlier.

In Asia, operating profit rose 19 percent to $306 million, from $257 million. A year earlier, MetLife recorded $57 million of costs after determining it needed more reserves in Australia.

Earnings climbed to $96 million in the Europe, Middle East and Africa region, MetLife said. The figure was $85 million a year earlier.

MetLife was named a systemically important financial institution in September, a designation the insurer appealed. The finding by a panel of U.S. overseers could subject the insurer to tighter capital, leverage and liquidity standards.

Prudential, the No. 2 U.S. life insurer, has already been deemed systemically important. The Newark, New Jersey-based company is scheduled to report results on Nov. 5

MetLife in June announced its first share buyback since 2008, saying it would repurchase as much as $1 billion of common stock. Kandarian had refrained from buybacks while preparing for the prospect of increased oversight from U.S. regulators.

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MetLife Inc., the largest U.S. life insurer, said third-quarter profit more than doubled on growth in its home market, fueled by investment results.
MetLife, Profit, Double
Wednesday, 29 October 2014 06:32 PM
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