MetLife Profit Rises On Derivative Gains, Revenue Growth

(RTTNews) - Life insurer MetLife Inc (MET), Wednesday reported a higher first-quarter profit, due mainly on derivative gains and marginal revenue growth, but still short of Wall Street estimates.

Under CEO Steve Kandarian, MetLife has shifted focus on international markets to spur growth, especially in Asia and Latin America.

The New York-based insurer posted first-quarter net income to shareholders of $1.3 billion or $1.14 per share, compared with $956 million or $0.87 per share last year.

Results for the recent quarter included net derivative gains of $340 million and an after-tax investment loss of $343 million related to the sale of its UK pension risk transfer business. The prior year quarter included derivative losses of $630 million.

MetLife uses derivatives as part of its asset-liability management strategy to hedge certain risks stemming from interest rates and foreign currencies.

Excluding items, operating earnings for the quarter were $1.56 billion or $1.37 per share, compared with $1.63 billion or $1.47 per share a year ago.

On average, 19 analysts polled by Thomson Reuters estimated earnings of $1.40 per share for the quarter. Analysts' estimates typically exclude special items.

The company said operating earnings were reduced by $0.05 per share, after tax, due to New York legal settlement costs.

Revenues for the quarter were up 1 percent at $17.11 billion, compared with $16.9 billion in the prior year. Ten analysts had a consensus revenue estimate of $17.67 billion for the quarter.

Premiums, fees & other revenues for the quarter climbed 2 percent to $12 billion from $11.80 billion last year.

The company said operating earnings in the Americas climbed 3 percent from the prior-year quarter, led by Corporate Benefit Funding and Latin America. Operating earnings for Asia were down 2 percent, while it inched up 1 percent in EMEA region.

At the end of the quarter, MetLife had book value of $56.65 per share, compared with $57.03 a year ago.

Last year, MetLife acquired Chilean pension provider AFP Provida SA, and in 2010, had wrapped up American Life Insurance Co, or Alico, for $16 billion from American International Group Inc (AIG). In March, MetLife was fined $60 million by New York regulators on charges that subsidiaries it acquired in the deal solicited business in the state without a license.

MetLife stock closed Wednesday at $52.35, up $0.51 or 0.98%, on a volume of 5.5 million shares on the NYSE. In the past year, the stock trended in the range of $38.37 - $54.80.