MetLife Profit Surges On Derivative Gains

(RTTNews) - Insurance provider MetLife Inc (MET), Wednesday reported a surge in second-quarter profit, helped by derivative gains along with some growth in Latin America and other regions. Operating earnings, however, missed Wall Street estimates, but revenue surpassed expectations.

The company benefited from a diverse business mix, as strong investment margins and favorable market performance helped offset weak underwriting results, said Steven Kandarian, MetLife chief executive officer.

Under CEO Steve Kandarian, MetLife has expanded in Latin America and Asia. Last year, MetLife acquired Chilean pension provider AFP Provida SA, and in 2010, wrapped up American Life Insurance Co for $16 billion from American International Group Inc (AIG).

MetLife said its operating earnings in the Americas rose 5 percent from the prior year, led by Latin America, Retail and Corporate Benefit Funding. Operating earnings in Asia were down 3 percent, mainly on lower surrender fee income from certain foreign currency fixed annuity products in Japan; while Europe, Middle East and Africa gained 37 percent.

For the second quarter, New York-based MetLife posted quarterly net earnings to shareholders of $1.34 billion or $1.17 per share, compared with $471 million or $0.43 per share last year.

Results for the quarter included after-tax derivative gains of $202 million, compared with a loss of $1.2 billion a year ago.

Excluding items, operating earnings for the quarter were $1.590 billion or $1.39 per share, compared with $1.585 billion or $1.43 per share a year ago.

On average, 19 analysts polled by Thomson Reuters estimated earnings of $1.41 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter climbed 5 percent to $17.80 billion from $17 billion in the prior year. Ten analysts had a consensus revenue estimate of $17.54 billion for the quarter.

Premiums, fees and other revenues for the quarter climbed 6 percent from last year to $12.7 billion.

Net investment income rose marginally to $5.1 billion.

At the end of the quarter, MetLife had a book value of $59.96 per share, up 13 percent from a year ago.

MetLife is expected to be designated a systemically important financial institution, and as a result, would come under Federal Reserve supervision and be subject to stricter liquidity standards.

MetLife stock closed Wednesday at $54.44, up $0.35 or 0.65%, on a volume of 7.3 million shares on the NYSE. In after hours, the stock dropped $1.14 or 2.09% at $53.30.