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MetLife Announces Second Quarter 2018 Results

August 1, 2018

NEW YORK--(BUSINESS WIRE)--Aug 1, 2018--MetLife, Inc. (NYSE:MET) today announced its results for the second quarter ended June 30, 2018.

Second Quarter Results Summary

Net income of $845 million, compared to net income of $865 million in the second quarter of 2017. On a per share basis, net income of $0.83, compared to net income of $0.80 in the prior-year period. Adjusted earnings* of $1.3 billion, or $1.30 per share, compared to adjusted earnings of $1.1 billion, or $1.04 per share in the second quarter of 2017. Book value of $50.28 per share, down 21 percent from $63.63 per share at June 30, 2017, primarily due to the separation of Brighthouse Financial, Inc. and its subsidiaries (Brighthouse). Book value, excluding accumulated other comprehensive income (AOCI) other than foreign currency translation adjustments (FCTA)*, of $42.76 per share, down 17 percent from $51.29 per share at June 30, 2017, also primarily due to the separation of Brighthouse. Return on Equity (ROE) of 6.5 percent. Adjusted ROE, excluding AOCI other than FCTA*, of 12.2 percent.

“MetLife delivered a very strong second quarter driven by solid underwriting and expense management around the globe,” said Steven A. Kandarian, chairman, president and CEO of MetLife, Inc. “During the quarter we divested our remaining stake in Brighthouse and returned approximately $1.5 billion to shareholders through common stock repurchases and dividends. We remain focused on improving our return on equity, maintaining strong free cash flow, meeting our expense targets, and distributing capital to shareholders.”

Second Quarter 2018 Summary

MetLife reported second quarter 2018 net income of $845 million, compared to net income of $865 million in the second quarter of 2017.

On a per share basis, net income was $0.83, compared to net income of $0.80 in the prior-year period.

Net investment income was $4.5 billion, up 7 percent.

Net derivative losses amounted to $47 million after tax during the quarter.

Premiums, fees & other revenues were $17.0 billion, up 51 percent over the second quarter of 2017. Adjusted premiums, fees & other revenues* were $16.9 billion, up 48 percent from the prior-year period on both a reported and constant currency basis*.

MetLife reported adjusted earnings of $1.3 billion, up 18 percent over the second quarter of 2017, on both a reported and constant currency basis. On a per share basis, which includes the impact of share repurchases, adjusted earnings were $1.30, up 25 percent from the prior-year period.

Supplemental slides for the second quarter of 2018, titled “2Q18 Supplemental Slides,” are available on the MetLife Investor Relations website at www.metlife.com in the Conferences & Presentations section, and in the Form 8-K furnished by MetLife to the U.S. Securities and Exchange Commission in connection with this earnings news release.

Adjusted Earnings by Segment Summary

Business Discussions

All comparisons of the results for the second quarter of 2018 in the business discussions that follow are with the second quarter of 2017, unless otherwise noted. See the second quarter 2018 notable items table that follows the Business Discussions section of this release for additional information on notable items incurred in the second quarter of 2018.

U.S.

Total adjusted earnings for the U.S. were $671 million, up 36 percent. Excluding the impact of U.S. tax reform, adjusted earnings were up 13 percent driven by favorable underwriting and volume growth. Adjusted return on allocated equity was 24.7 percent, and adjusted return on allocated tangible equity was 28.6 percent. Adjusted premiums, fees & other revenues were $11.8 billion, up 86 percent, driven by a large pension risk transfer transaction in Retirement and Income Solutions. Excluding pension risk transfers, adjusted premiums, fees & other revenues were up 5 percent.

Group Benefits

Adjusted earnings for Group Benefits were $261 million, up 29 percent. Excluding the impact of U.S. tax reform, adjusted earnings were up 6 percent driven by favorable underwriting and volume growth. Adjusted premiums, fees & other revenues were $4.4 billion, up 4 percent. Sales for Group Benefits were down 4 percent year-to-date compared to the first half of 2017 which saw record jumbo case sales.

Retirement and Income Solutions

Adjusted earnings for Retirement and Income Solutions were $347 million, up 32 percent. Excluding the impact of U.S. tax reform, adjusted earnings were up 9 percent driven by favorable interest margins, underwriting and volume growth. Adjusted premiums, fees & other revenues were $6.5 billion, up 424 percent from the prior-year period, primarily driven by a large pension risk transfer transaction. Excluding pension risk transfers, adjusted premiums, fees & other revenues were up 26% percent.

Property & Casualty

Adjusted earnings for Property & Casualty were $63 million, up 125 percent, primarily due to favorable underwriting in both auto and home. Adjusted premiums, fees & other revenues were $897 million, up 1 percent. Pre-tax catastrophe losses and prior year development totaled $104 million, compared to $122 million in the prior-year period. Sales for Property & Casualty were $157 million, up 23 percent.

ASIA

Adjusted earnings for Asia were $363 million, up 17 percent, and up 16 percent on a constant currency basis, driven by volume growth, higher investment income and lower taxes. Adjusted return on allocated equity was 10.2 percent, and adjusted return on allocated tangible equity was 15.4 percent. Adjusted premiums, fees & other revenues were $2.1 billion, up 1 percent and down 1 percent on a constant currency basis, reflecting the continued shift away from premium-based products to fee-based products. Total sales for the region were $688 million, up 26 percent on a constant currency basis. Japan sales were up 42 percent primarily driven by foreign currency denominated products. Other Asia sales were up 3 percent, primarily driven by China.

LATIN AMERICA

Adjusted earnings for Latin America were $145 million, down 6 percent, and down 3 percent on a constant currency basis, primarily due to higher taxes in the region. Excluding the negative impact of U.S. tax reform, adjusted earnings were up 1 percent, and 4 percent on a constant currency basis, driven by volume growth. Adjusted return on allocated equity was 18.5 percent, and adjusted return on allocated tangible equity was 30.9 percent. Adjusted premiums, fees & other revenues were $972 million, up 5 percent, and up 7 percent on a constant currency basis, due to growth across the region. Total sales for the region were up 6 percent on a constant currency basis, driven by higher direct marketing sales.

EMEA

Adjusted earnings for EMEA were $86 million, up 19 percent, and up 15 percent on a constant currency basis. Excluding the negative impact of U.S. tax reform, adjusted earnings were up 34 percent, and 28 percent on a constant currency basis. Adjusted return on allocated equity was 9.9 percent, and adjusted return on allocated tangible equity was 16.2 percent. Adjusted premiums, fees & other revenues were $673 million, up 8 percent, and up 5 percent on a constant currency basis. Total sales for the region were $228 million, down 6 percent on a constant currency basis. Excluding the impact from exiting the UK wealth management business in mid-2017, sales were up 1 percent.

METLIFE HOLDINGS

Adjusted earnings for MetLife Holdings were $280 million, up 18 percent. Excluding the impact of U.S. tax reform, and adjusting for the notable item in the prior-year period, adjusted earnings were down 14 percent due to lower investment income and life underwriting, partially offset by favorable expenses. Adjusted return on allocated equity was 11.1 percent, and adjusted return on allocated tangible equity was 12.6 percent. Adjusted premiums, fees & other revenues were $1.3 billion, down 6 percent.

CORPORATE & OTHER

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