MetLife Profit Drops On Derivatives

(RTTNews) - Insurance provider MetLife Inc. (MET), said Wednesday its second-quarter profit plunged, hurt mainly by some derivative losses amid higher interest rates and foreign currency translation.

However, excluding items, operating earnings for the quarter topped Wall Street estimates, on growth in the U.S. and Asia, even as revenues fell shy of expectations.

The largest U.S. life insurer suffered after-tax derivative losses of $1.2 billion during the quarter, after having recorded gains of $1.3 billion in the prior year.

MetLife, like other insurers, uses derivatives as part of its asset-liability management strategy to hedge certain risks, such as volatile interest rates and foreign currencies.

The New York-based insurer reported quarterly net earnings to common stock of $471 million or $0.43 per share, compared with $2.26 billion or $2.12 per share last year.

Excluding items, operating earnings for the quarter were $1.59 billion or $1.44 per share, compared with $1.43 billion or $1.33 per share in the prior year.

On average, 22 analysts polled by Thomson Reuters expected earnings of $1.33 per share for the quarter. Analysts' estimates typically exclude special items.

Operating earnings in its key region of Americas grew 18 percent from a year ago, and Asia climbed in the equivalent. The company continues to focus on emerging markets and shifting its business toward lower capital intensive products.

Meanwhile, operating earnings in Europe, the Middle East and Africa slid 13 percent.

Revenues for the quarter grew a modest 2 percent to $17.04 billion from $16.74 billion a year ago. Analysts expected revenues of $17.33 billion for the quarter.

Premiums for the quarter rose modestly to $9.16 billion from $9.14 billion last year.

The company recorded growth in Retail and Group, Voluntary & Worksite Benefits businesses in Latin America.

Net investment income was $5.1 billion, compared with $5.18 billion last year.

At the end of the quarter, MetLife's book value per share was $52.85, down from $56.83 a year ago.

MET closed Wednesday's regular trade at $48.42, up $0.19 or 0.39%, on a volume of 7.5 million shares on the NYSE. In after hours, the stock gained $0.08 or 0.17%.