MetLife (MET) fourth quarter earnings and revenue beat estimates

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MetLife, Inc. MET reported fourth-quarter 2021 adjusted operating income of $2.39 per share, which beat Zacks’ consensus estimate by 52.8%. Net income also improved by 6.9% year on year.

Results were helped by strong contributions from its MetLife Holdings, Latin America and Asia businesses.

MetLife, Inc. Price, Consensus, and EPS Surprise

MetLife, Inc. price-consensus-eps-surprise-chart | Quote from MetLife, Inc.

Behind the headlines

MetLife’s adjusted operating revenue of $20 billion fell 1.8% year-over-year. However, revenue exceeded Zacks’ consensus estimate by 19.8%.

Adjusted premiums, fees and other income excluding pension risk transfer (PRT) decreased 1% year-over-year to $11.5 billion in the quarter under review .
Adjusted net investment income of $5.2 billion increased 7% year over year, driven by growth in variable investment income resulting from improved private equity yields.

Total expenses fell 2.4% year-over-year to $18.7 billion in the fourth quarter due to lower interest credited to policyholder account balances, policyholder dividends policies, DAC and VOBA amortization and lower other expenses.

The adjusted expense ratio excluding total other expense and PRT notable items contracted 20 basis points (bps) year-on-year to 20.4%.
Adjusted book value per share of $77.12 fell 2% year over year.

Adjusted return on equity excluding AOCI other than FCTA increased by 10 basis points year-on-year to 15.3% in the quarter under review.

Sector performance

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Adjusted profit for this segment fell 37% year-over-year to $640 million due to unfavorable underwriting. However, the same was partly offset by better variable investment income.

Adjusted premium, fee and other income was $10.1 billion for the segment, which was down 5% year-over-year due to higher retirement risk transfer sales .

Asia

Adjusted profit of $586 million was up 19% year over year.

At constant exchange rates (cc), adjusted earnings increased 21% year-over-year, driven by higher variable investment income and growing volumes as well as favorable expense margins.

Adjusted premiums, fees and other income decreased 6% year-over-year to $2 billion in the quarter under review. The same was true at constant exchange rates.

Latin America

Adjusted earnings for the segment totaled $125 million, comparing favorably to the $14 million figure in the prior year quarter. CC adjusted earnings of $125 million also jumped from the quarter’s value of $12 million a year ago. This is due to the drop in claims related to COVID-19.

Adjusted premiums, fees and other income of $962 million increased 10% year-over-year in the segment.

EMEA

EMEA adjusted profit fell 48% year-over-year to $42 million. At cc, adjusted earnings were down 45% year-over-year due to unfavorable underwriting associated with COVID-19, as well as higher expenses and the exclusion of businesses divested during the year. ‘current year.

Adjusted premiums, fees and other income of $621 million was down 12% year-over-year.

MetLife Holdings

MetLife Holdings adjusted profit was $482 million, up 13% from the year-ago quarter level. The benefit came on the back of improved variable investment income.

Adjusted premiums, fees and other income of $1.2 billion was down 5% year-over-year in the third quarter.

Business and other

The adjusted loss of $37 million was down from the prior year quarter loss of $198 million.

Financial update

Total equity as of December 31, 2021 was $67.4 billion, down 9.5% from the figure reported a year ago.

Share buyback update

MET repurchased shares worth $1.2 billion during the quarter under review.

2021 Update

Total revenue for the year increased 4.8% year over year.

Adjusted earnings, excluding total notable items, for the full year were $9.07, up 42% year-over-year. Adjusted premiums, fees and other income, excluding pension risk transfer (PRT), increased 2% year-over-year.

Zacks Rank

MetLife currently carries a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of other insurers

Among insurance industry players that have reported their fourth quarter results so far, the net results of International Society of the Old Republic OR I, The Travelers Companies, Inc.. TRV and Brown & Brown, Inc.. BRO beat Zacks’ respective consensus estimate.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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