U.S. life insurer MetLife Inc. (MET), Thursday posted a first-quarter loss from a profit last year, as derivative losses increased amid higher interest rates and lower credit spreads.
Nevertheless, operating earnings improved 11 percent and exceeded analysts' expectations, driven mainly by strong performance at Americas and Asia.
Last week, MetLife in a statement said it had published preliminary results on April 20 to help investors understand the presentation of results "to reflect its reorganization into six segments" on its website. While the 2012 figures were embedded, it could be accessed to make visible some data related to 2012.
Derivative net losses for the quarter rose to $1.3 billion from $253 million last year. The company, like other insurance companies, uses derivatives to generate income and hedge against market risks, such as interest rate changes and foreign currency fluctuations. The derivatives make losses as bond yields rises. In the first quarter, U.S. Treasury notes continued to rise on the fear of a stalling economy.
In Americas, operating earnings for the first quarter grew 13 percent to $1.2 billion while premiums, fees & other revenues grew 7 percent. Operating earnings for Asia rose 33 percent to $297 million, due mainly to growth in Japan as well as expense efficiency. EMEA operating earnings dropped 4 percent to 76 million due to the negative impact of foreign currency exchange rates.
Operating earnings, which exclude investment gains and losses, for the quarter improved to $1.46 billion or $1.37 per share from $1.32 billion or $1.23 per share last year. On average, 20 analysts polled by Thomson Reuters expected earnings of $1.28 per share for the quarter. Analysts' estimates typically exclude one-time items.
The New York-based company's first-quarter net loss was $174 million or $0.16 per share, compared to net income of $701 million or $0.66 per share last year.
Total operating revenues for the quarter grew 7 percent to $16.69 billion from $15.62 billion last year. Wall Street analysts on a consensus estimated revenues of $16.67 billion for the quarter.
Premiums, fees, and other revenues combined advanced to $11.61 billion from $10.83 billion last year, reflecting strong growth in all three geographic regions.
Earlier on Thursday, MetLife said it is exiting the reverse mortgage business. The company proposes to sell its reverse mortgage servicing portfolio to Nationstar Mortgage LLC.
MET closed Thursday's trading at $36.47, up $0.50 or 1.39%, on a volume of 6.4 million shares on the NYSE. In after hours, the stock lost $0.08 or 0.22%.
by RTT Staff Writer
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