MetLife Rises Most in Two Years After Third Straight Profit Beat

(Bloomberg) -- MetLife Inc. climbed the most in two years after the company said it plans to buy back as much as $2 billion in shares and reported profit that beat analysts’ estimates for the third straight quarter, showing Chief Executive Officer Steven Kandarian’s push to be more consistent is paying off.

  • The U.S. and Latin American businesses fueled gains, while private-equity returns boosted investments. Adjusted profit came in at $1.38 a share, beating the $1.26 estimate from 17 analysts surveyed by Bloomberg.

Key Insights

  • “We believe we are now at an inflection point where the heavy lifting of our transformation is just about complete,” Kandarian said Friday during an earnings call discussing results. “We are executing more consistently, and the results from the quarter and for year-to-date 2018 demonstrate our strategy is working.”
  • Kandarian spun off large U.S. retail business Brighthouse Financial Inc. last year to lessen fluctuations in the firm’s results. That helped net income swing to a profit of $880 million from a loss of $97 million a year earlier.
  • The New York-based insurer didn’t get caught up in the long-term care storm this time around. MetLife reviewed its books and didn’t need to tweak reserves, unlike peers Prudential Financial Inc. and Unum Group, which booked charges this year.
  • Pension-risk transfers, which let employers offload obligations to insurers, have been a growing market for the industry, but were less lucrative in the third quarter. MetLife saw smaller-sized pension-risk-transfer transactions in the period.

Market Reaction

  • MetLife shares climbed as much as 6 percent, the most since November 2016, before paring the gain to 4.7 percent at 10:13 a.m. in New York. That narrowed the loss to 13 percent this year.

Get More

  • The new buyback follows MetLife’s repurchase of $1 billion under an authorization program it announced in May, continuing the CEO’s push to return more capital to shareholders.
  • For more details on the results, click here.
  • Read the statement here.

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