What To Expect From MetLife’s Q1 Results

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MetLife (NYSE:MET) is scheduled to report its first quarter earnings on Wednesday, May 3rd. In Q4 2016, the insurer’s adjusted revenues were flat year-over-year (y-o-y) at $17.2 billion and missed market estimates of $17.34 billion. The lower-than-expected revenue was attributed to a $243 million charge for investment hedge adjustments, partially offset by a 3% increase in net investment income. In terms of the bottom line, strong performances by the Retirement and Group Benefits businesses in the U.S. and favorable underwriting in EMEA and Asia were offset by operating losses in Latin America, MetLife Holdings and Brighthouse Financial, and the company’s operating earnings grew by just 3% to $1.4 billion or $1.28 per share, missing consensus estimates by around 5%.

In the upcoming Q1 results, we expect MetLife’s revenues to decline in mid-single digits but earnings to increase in high single-digits, in line with consensus estimates compiled by Reuters.met-30
Factors Contributing To Earnings

  • Interest Rates: Interest rates were low last year but have improved over the last 3 months. This is likely to have positively impacted MetLife’s investment income in the first quarter.
  • Strong Yen: We expect MetLife’s results to be positively impacted by a slightly stronger Japanese Yen (year over year), considering Japan contributes 85-90% of the company’s operating earnings in Asia, about half of which are earned in Yen. Asia contributed about 16% of MetLife’s revenues and 20% of its operating earnings last year.met-31

See our full analysis of MetLife

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