MetLife Q4 Earnings Miss Estimates on Weak RIS & EMEA Unit

Core Insights - MetLife, Inc. reported fourth-quarter 2024 adjusted operating earnings per share (EPS) of $2.08, missing the Zacks Consensus Estimate by 2.4%, but showing a year-over-year increase of 7.8% [1] - Adjusted operating revenues reached$ 19.7 billion, reflecting a 5.4% year-over-year growth and surpassing the consensus mark by 2.7% [2] Financial Performance - Weaker quarterly earnings were attributed to reduced non-medical health underwriting margins in the Group Benefits segment, a decline in recurring interest margin, and less favorable underwriting in the Retirement and Income Solutions (RIS) segment, along with decreased adjusted premiums, fees, and other revenues in Asia and Latin America [3] - Adjusted PFOs, excluding pension risk transfer (PRT), grew 0.3% year over year to $11.8 billion [5] - Adjusted net investment income was$ 5.3 billion, up 5% year over year, driven by asset growth and higher variable investment income [5] - Total expenses decreased by 4.4% year over year to $17.3 billion, attributed to lower interest credited to policyholder account balances and reduced policyholder dividends [6] - Net income more than doubled year over year to$ 1.2 billion, with an adjusted return on equity of 15.4%, improving by 160 basis points year over year [7] Segment Performance - Group Benefits segment reported adjusted earnings of $416 million, down 11% year over year but above the consensus estimate [8] - RIS segment's adjusted earnings declined 8% year over year to$ 386 million, missing the consensus mark [9] - Asia's adjusted earnings grew 50% year over year to $443 million, exceeding the consensus estimate, despite a 4% decline in adjusted PFOs [10] - Latin America reported adjusted earnings of$ 201 million, a 3% year-over-year decrease, with adjusted PFOs declining 3% [11] - EMEA segment's adjusted earnings increased 26% year over year to $59 million, although it fell short of the consensus estimate [12] - MetLife Holdings segment's adjusted earnings declined 2% year over year to$ 153 million, missing the consensus mark [13] Financial Position - As of December 31, 2024, MetLife had cash and cash equivalents of $20.1 billion, down 2.8% from the previous year [14] - Total assets were$ 677.5 billion, a decrease of 1.5% from the end of 2023 [14] - Long-term debt totaled $15.1 billion, down 3% year over year, while total equity fell 8.4% to$ 27.7 billion [14][15] Capital Deployment and Outlook - MetLife repurchased shares worth $0.4 billion in the fourth quarter and plans additional repurchases of approximately$ 470 million in January 2025 [16] - For 2025, management expects variable investment income of $1.7 billion and anticipates adjusted losses in Corporate & Other to be between$ 850 million and $950 million [17] - Over the next three years, adjusted PFOs in the Group Benefits business are projected to rise by 4-7%, while declines are expected in the MetLife Holdings segment [18] - The company aims for an adjusted return on equity in the range of 15-17% and double-digit adjusted EPS growth in the near term [19]