MetLife Q3 profit rises 12% as investment income climbs

MetLife (MET) said in a regulatory filing on Nov. 4 that third-quarter adjusted earnings rose 12% to $1.78 billion, driven by higher variable investment income, volume growth and favorable underwriting.

Adjusted earnings per share were $2.78, in line with the $2.80 consensus estimate.

MetLife is a financial services company providing insurance, annuities, employee benefits and asset management.

Here's how the company did:

• Adjusted EPS: $2.78 vs. $2.37 a year earlier, in line with the $2.80 consensus estimate
• Net income available to common shareholders: $2.35 billion, or $3.67 per share, vs. $818 million, or $1.22 per share, a year earlier
• Total adjusted revenues: $19.91 billion vs. $17.90 billion a year earlier, below the $20.18 billion consensus estimate

Net income was $2.4 billion, driven by net derivative gains and higher adjusted earnings, the company said.

Excluding notable items, adjusted earnings per share rose 22% to $2.85. The company said it was the highest-ever quarter for MetLife.

President and Chief Executive Officer Michel Khalaf said: “We delivered the highest quarterly adjusted earnings per share in MetLife’s history in the third quarter, demonstrating the strength of our New Frontier strategy and discipline of our execution.”

Segment results

Group Benefits adjusted earnings rose 15% to $523 million.

Retirement and Income Solutions adjusted earnings fell 6% to $413 million, reflecting notable items from the annual actuarial assumption review. Excluding notable items, RIS adjusted earnings rose 12%.

The review and other insurance adjustments reduced adjusted earnings by $46 million during the quarter, the company said.

Asia adjusted earnings rose 11% to $602 million. Latin America rose 45% to $215 million, and Europe, the Middle East and Africa rose 24% to $108 million. MetLife Investment Management rose 9% to $63 million.

Investment income and capital

Variable investment income rose 49% to $720 million, above the at least $600 million the company estimated in a Sept. 25 filing.

Book value per share fell 22% to $30.73, while adjusted book value per share rose 5% to $59.41.

The company returned about $1 billion to shareholders through share repurchases and common stock dividends. It held $3.4 billion in holding company cash and liquid assets at quarter end.

Outlook

The company said it is on track to deliver against its free cash flow ratio and direct expense ratio targets for the year. The direct expense ratio, excluding notable items, was 11.9%, compared with 11.6% a year earlier.

MetLife will hold its earnings call on Nov. 5, from 9 to 10 a.m. ET.