MetLife Inc.’s (MET) third-quarter operating earnings of 87 cents per share were only a penny ahead of the Zacks Consensus Estimate. This also compares favorably with operating earnings of 84 cents in the prior-year quarter. Operating income excludes after-tax net investment gains or losses of consolidated entities and discontinued operations. The upside came primarily from increased [...]

(MET) MetLife Surpasses Consensus Estimates by a Penny

In the early 1990s, a product called fixed rate capital securities was introduced to meet the needs of income-oriented investors and provide a cost efficient source of capital for issuers.[More...]

US stocks finished with steep losses on Friday a decline in consumer confidence and consumer sentiment index spooked investors. A sharp selloff in financials also pressurized stocks.[More...]

MetLife Inc.’s (MET) third-quarter operating earnings of 87 cents per share were only a penny ahead of the Zacks Consensus Estimate. This also compares favorably with operating earnings of 84 cents in the prior-year quarter. Operating income excludes after-tax net investment gains or losses of consolidated entities and discontinued operations. 

The upside came primarily from increased sales in a number of product areas in both the U.S. and internationally and strong variable annuity deposits. However, overall results were hurt by massive realized investment losses and lower investment income driven primarily by negative returns from real-estate funds, though the performances of securities lending, hedge funds and corporate joint ventures remained solid. 

Net loss for the quarter was $650 million, or 79 cents per share, compared to a net income of $600 million or 83 cents in the year-ago quarter. Net loss included after-tax net realized investment losses of $1.4 billion (including derivative losses of $857 million), compared to an after-tax gain of $483 million in the prior-year quarter. 

Total revenue for the reported quarter fell 23.3% to $10.2 billion from $13.4 billion in the year-ago period. Earned premiums decreased 2.7% year-over-year to $6.6 billion. Net investment income decreased 3.1% year-over-year to $3.9 billion. 

The Institutional segment’s operating earnings for the quarter decreased 21.5% year-over-year to $311.0 million. Premiums, fees & other revenues, excluding pension closeout sales, were up 3.0%, due in part to a 51.0% increase in structured settlement premiums. 

The Auto & Home segment’s operating earnings decreased 14.9% year-over-year to $86 million. Net written premiums for this segment were down 2.0% year-over-year to $754 million and continued to reflect current market conditions. 

The International segment’s operating earnings increased 29.7% year-over-year to $153 million as the adverse impact of foreign currency exchange rates was offset by lower expenses and approximately $14 million (after-tax) in one-time benefits. 

As of Sep 30, 2009, book value per share (excluding AOCI) declined to $41.65 from $45.85 as of Sep 30, 2008. However, book value (including AOCI) per share improved to $38.95 as of Sep 30, 2009, versus $35.48 as of Sep 30, 2008. 

Investment losses and lower investment income continued to hurt results. While we think MetLife should continue to benefit from a diversified business mix and its leading brand, higher losses in the investment portfolio will impact results in the coming quarters. 

The company’s capital position remains one of the sturdiest in the industry. However, we are concerned about MetLife’s significant exposure to commercial mortgage-backed securities.
Read the full analyst report on "MET"
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U.S. stocks rose strongly Thursday, reversing a four-session losing run, after a government report said the economy grew more than expected in the July-September quarter.  Investors shunned Treasuries and jumped back into stocks after the report signaled the economy had emerged from the worst recession since the 1930s. 

The positive surprise was enough to propel benchmark indexes to their biggest advance since July and send safe havens like Treasuries and dollar lower.  Caterpillar Inc. (NYSE:CAT) and Alcoa Inc. (NYSE:AA) advanced at least 5.1% after the Commerce Department said the economy returned to growth following four straight quarters of decline.  Crude prices jumped $2.44, or 3.1%, to $79.87 and gold was up $16.50 to $1046.40.

The S&P 500 registered its biggest one-day gain since July 23, jumping 2.2% to close at 1,066.11.  The 30-share Dow Jones industrial average shot up by 199.89 points, or 2.05%, at 9,962.58 and the tech-heavy Nasdaq Composite index 37.94 points, or 1.84%, to 2,097.55.  The advance was broad-based on the New York Stock Exchange where advancing issues ran ahead of those that declined by a five-to-one margin.  Treasuries also took a beating after an auction of seven-year notes received a weaker-than-expected response.  As the month-end nears, the DJIA has advanced 2.6% in October; the S&P500 0.9%, while the NASDAQ remains 1.2% lower for the month.

A lackadaisical third-quarter performance from Exxon Mobil (NYSE:XOM) could not dampen the mood either and the company’s shares edged up 0.16%.  Procter & Gamble (NYSE:PG), also a Dow component, reported weaker quarterly earnings but revenue was above expectations. The consumer products maker also raised the low end of its fiscal 2010 earnings forecast and its shares rose 4%.

Twenty-eight of the DJIA's 30 components finished higher while all ten industry sectors of the S&P500 rose during the day, led by advances in basic materials (+4.1%), financials (+3.9%), oil and gas (+2.4%), consumer services (+2.4%), and industrials (+2.2%). 

Among financials, MetLife Inc. (NYSE:MET) jumped 7.9% to $36.84 ahead of its earnings report.  After the close, the biggest U.S. life insurer reported estimate-topping third-quarter operating earnings of 87 cents a share.  Lincoln National Corp. (NYSE:LNC) surged 14% to $25.34 after it reported first quarterly profit in a year that was also ahead of estimates.

Meanwhile, the International Monetary Fund sharply boosted its outlook for Asian economic growth. The IMF also raised its next year's guidance.  The IMF now expects economic growth of 2.8% this year and 5.8% next, up from last May's estimates for 2009 growth of 1.2% and 2010 growth of 4.3%.

Firms reporting their earnings include: Chevron (NYSE:CVX), Duke Energy (NYSE:DUK), Sony (NYSE:SNE), and Weyerhaeuser (NYSE:WY).

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