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MetLife Q3 Earnings Miss on Weak Group Benefits Unit & High Costs
METMetLife(MET) ZACKS·2024-10-31 17:51

Core Insights - MetLife, Inc. reported third-quarter 2024 adjusted operating earnings of 1.93pershare,missingtheZacksConsensusEstimateby10.71.93 per share, missing the Zacks Consensus Estimate by 10.7%, and a 1% decline year over year [1] - Adjusted operating revenues were 17.6 billion, down 3.4% year over year, also missing the consensus mark by 4.7% [1] Financial Performance - Total expenses increased to 16.4billion,up7.316.4 billion, up 7.3% year over year, primarily due to higher interest credited to policyholder account balances [4] - Adjusted net investment income rose 2% year over year to 5.1 billion, supported by rising rates and asset growth [3] - Net income more than doubled year over year to 1.3billion,whileadjustedreturnonequitydecreasedby30basispointsto14.61.3 billion, while adjusted return on equity decreased by 30 basis points to 14.6% [5] Segment Analysis - Group Benefits segment adjusted earnings fell 27% year over year to 373 million, missing the consensus estimate [6] - RIS segment adjusted earnings increased 0.4% year over year to 472million,beatingtheconsensusmark[7]−Asiasegmentadjustedearningsgrew11472 million, beating the consensus mark [7] - Asia segment adjusted earnings grew 11% year over year to 306 million but missed the consensus estimate [8] - Latin America segment adjusted earnings rose 11% year over year to 221million,laggingtheconsensusmark[9]−EMEAsegmentadjustedearningsdeclined20221 million, lagging the consensus mark [9] - EMEA segment adjusted earnings declined 20% year over year to 70 million, exceeding the consensus estimate [10] - MetLife Holdings segment adjusted earnings dropped 13% year over year to 182 million, beating the consensus mark [11] - Corporate & Other segment incurred an adjusted loss of 249 million, an improvement from the prior year's loss [12] Balance Sheet and Capital Deployment - As of September 30, 2024, MetLife had cash and cash equivalents of 14.9billion,down27.714.9 billion, down 27.7% from the end of 2023 [13] - Total assets decreased by 5.2% to 652.1 billion, while total equity fell 14.4% to 25.9billion[13]−Thecompanyrepurchasedsharesworth25.9 billion [13] - The company repurchased shares worth 0.8 billion in the third quarter and plans additional repurchases of approximately 130millioninOctober2024[15]2024Outlook−Managementanticipatesvariableinvestmentincomeof130 million in October 2024 [15] 2024 Outlook - Management anticipates variable investment income of 1.5 billion for 2024, with adjusted losses in Corporate & Other expected between 750millionand750 million and 850 million [16] - Adjusted earnings in the Asia segment are projected to grow by 20% [17] - Near-term targets include a 4-6% increase in adjusted PFOs for Group Benefits and MetLife Holdings segments over the next three years [18] - The company aims for an adjusted return on equity of 13-15% and a free cash flow ratio of 65-75% of adjusted earnings [19]