(Bloomberg) -- MetLife Inc.’s had a difficult year, but its first-quarter financial results may offer some solace.
The insurer posted adjusted profit of $1.36 a share, beating analysts’ estimates and pushing shares higher in extended trading. MetLife benefited from tax code changes and gains in operating profit at its U.S., Asia, and Europe, Middle East and Africa businesses, the New York-based company said Wednesday in a statement.
“MetLife had a very good first quarter driven by favorable underwriting, volume growth, and the effects of tax reform,” Chief Executive Officer Steven Kandarian said in the statement.
The company has been working to fix deficiencies after reporting it was unable to locate about 13,500 people owed pension payments, an admission that spurred a Securities and Exchange Commission investigation. MetLife also disclosed in March that there was a material weakness in controls tied to a block of Japanese variable annuities.
That led Wells Fargo & Co. analyst Sean Dargan to describe MetLife’s story as being about “management credibility” and Evercore Inc.’s Tom Gallagher to say that the insurer needs stability and a lack of bad news to restore confidence.
On Tuesday, the company said Chief Financial Officer John Hele was stepping down and would be replaced by Treasurer John McCallion. Evercore’s Gallagher called McCallion a “solid choice.”
MetLife shares gained 2.6 percent to $46.20 at 4:49 p.m. in New York. The stock fell 11 percent this year through the end of Wednesday’s regular trading.
Net income rose 44 percent to $1.25 billion, or $1.19 a share, from $867 million, or 79 cents, a year earlier, according to the statement. Adjusted profit, which excludes some items, was $1.36 a share, beating the $1.17 average estimate of 16 analysts surveyed by Bloomberg.
Adjusted profit for the company’s U.S. unit climbed 31 percent to $653 million, fueled by growth in group benefits and better results at the property-casualty unit that sells auto and home insurance.
Kandarian has called out the retirement and income solutions business for failing to “live up to” the company’s standards by not looking hard enough for people owed pension payments. That unit reported a profit of $339 million, up 24 percent from a year earlier. Pension-risk transfer deals, where the insurer takes on those retirement obligations from an employer, were lower in the period, the insurer said.
Also Wednesday, Prudential Financial Inc. reported adjusted profit of $3.08 per share, beating analysts’ average estimate by 10 cents. Higher sales in the group insurance business that sells policies through employers and better annuity sales helped drive gains, the Newark, New Jersey-based company said in a statement.
MetLife last year spun off a U.S. retail business called Brighthouse Financial Inc. as it sought to focus on group benefits and international markets. Profit for the Asia division rose 11 percent to $327 million, helped by sales in Japan, while Latin America profit slipped 2 percent to $140 million.
Other first-quarter highlights include:
- Profit for the U.S. group benefits unit increased 12 percent to $218 million. Property-casualty earnings more than tripled to $96 million and sales at that business increased 16 percent.
- The Europe, Middle East and Africa divisions posted profit of $81 million, up from $75 million a year earlier.
- The company experienced lower hedge fund income in its investments during the quarter.
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