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