Metlife’s Q1 Earnings Disappoint On Lower Investment Income

May 5th, 2016 by Trefis Team
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MetLife

MetLife (NYSE:MET) announced disappointing first quarter results, with low interest rates pressuring the company’s total revenues and operating profit. In Q1 2016, total operating revenues fell 2.5% year-over-year (y-o-y) to $16.6 billion and operating earnings declined 19% to $1.3 billion. However, net income improved by 2% y-o-y to $2.2 billion driven by robust gains on derivatives.

The company attributed the decline in operating earnings to the sharp fall in its Variable Investment Income, down from $371 million in Q1 2015 to $165 million in Q1 2016. MetLife’s Variable Investment Income is driven by returns of alternative asset classes including hedge funds and private equity. In addition to the aforementioned factors, the company also attributed its lackluster results to unfavorable catastrophe experience, which hurt operating earnings by $45 million (after tax) in the quarter.met-6met-7met-8

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Notes:

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