What To Expect From MetLife’s Q3 Results
MetLife (NYSE:MET) is scheduled to report its third quarter earnings on Thursday, November 3. In the second quarter, MetLife reported a 2.5% year-over-year (y-o-y) decline in total operating revenues to just under $17 billion on lower investment income and policy fee. The revenue decline, in addition to an increase in operating expenses – particularly Policyholder benefits and claims and Policyholder dividends – led to a significant decline in MetLife’s operating income for the quarter.
In the upcoming Q3 results, we expect MetLife’s revenues to decline in mid-single digits but earnings to increase in double-digits, in line with consensus estimates compiled by Reuters.
Factors Contributing To Earnings
- Interest Rates: Interest rates have remained low since the start of the year and economic uncertainty due to the U.K.’s Brexit vote has pushed government bond yields to extremely low levels. This is likely to have adversely impacted MetLife’s investment income in the third quarter as well.
- Strong Yen: We expect MetLife’s results to be positively impacted by a stronger Japanese Yen, considering Japan contributes 85-90% of the company’s operating earnings in Asia, about half of which is earned in Yen. Asia contributed about 16% of MetLife’s revenues and 28% of its operating income in the second quarter this year.
See our full analysis of MetLife
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