MetLife’s profit beats estimates; stock in green

Insurer MetLife (MET) reported a 44% jump in first-quarter earnings driven by favorable underwriting, volume growth, and the effects of tax reform. Despite revenue missing consensus, adjusted earnings came in above Street’s expectations, driving the stock up by around 3% in the aftermarket hours trading.

Despite revenue inching down by 1% to $14.81 billion, the company’s earnings jumped by 44% to $1.25 billion or $1.19 per share. Adjusted EPS increased 13% to $1.36.

MetLife, which is a large investor in the U.S. fixed income market, benefited from economic growth that has led to higher interest rates. The company incurred lower expenses from interest credited to policyholder account balances and a drop in expenses related to policyholder benefits and claims.

Book value per share decreased 14% to $52.49 primarily due to the separation of Brighthouse Financial and its subsidiaries. Excluding accumulated other comprehensive income other than foreign currency translation adjustments, book value per share fell by 15%.

Net investment income tumbled 15% due to changes in the estimated fair value of certain securities which do not qualify as separate accounts under GAAP accounting. On the other hand, premiums, fees & other revenues rose by 4%.

Total sales for Asia region slid 10% on a constant currency basis as a large group case in Australia dragged other Asia sales, which was down by 31%. Lower Mexico group sales hurt Latin America total sales. The impact of exiting the UK wealth management business in mid-2017 weighted heavily in the EMEA sales.

A day before the results, MetLife announced that its finance chief John C.R. Hele will be leaving the company and will be succeeded by EVP John McCallion, who is currently Treasurer. John Hele will stay as a senior adviser until September 2018. McCallion’s first day as finance chief is May 1.

Shares of MetLife ended Wednesday’s regular trading session down 4.75% at $45.05 on the NYSE. The stock had been between $43.38 and $55.91 for the past 52 weeks.