10-QPeriod: Q1 FY2013

METLIFE INC Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 7, 2013For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife Inc. (MET) reported a net income of $986 million for the first quarter of 2013, a significant turnaround from a net loss of $144 million in the same period of 2012. This improvement was largely driven by a substantial reduction in net derivative losses, which swung from a $1.978 billion loss in Q1 2012 to a $630 million loss in Q1 2013, and a $424 million improvement in net investment gains (losses). The company also saw a rise in operating earnings available to common shareholders to $1.635 billion, up from $1.464 billion in the prior year's quarter, reflecting growth in investment income and higher asset-based fee revenue. The company announced a pending acquisition of Provida, a Chilean pension fund administrator, for approximately $2 billion, and continued to execute on its enterprise-wide strategic initiative aimed at cost reduction and operational efficiencies.

Financial Highlights

33 data points
Beta

Revenue

$17.68B

Net Income

$986.00M

5.6% Net Margin

EPS (Diluted)

$0.87

Total Assets

$841.68B

Cash & Equivalents

$9.98B

Free Cash Flow

$2.73B

Financial Statements
Beta
Revenue$17.68B
Operating Expenses$4.14B
Operating Income$959.00M
Net Income$986.00M
EPS (Basic)$0.87
EPS (Diluted)$0.87
Shares Outstanding (Basic)1.10B
Shares Outstanding (Diluted)1.10B

Key Highlights

  • 1Net income surged to $986 million in Q1 2013, a substantial improvement from a net loss of $144 million in Q1 2012.
  • 2Operating earnings available to common shareholders increased to $1.635 billion in Q1 2013 from $1.464 billion in Q1 2012.
  • 3Net derivative losses decreased significantly, contributing positively to earnings.
  • 4Net investment income showed growth, driven by portfolio expansion and higher asset-based fee revenue.
  • 5MetLife announced a significant pending acquisition of Provida, the largest private pension fund administrator in Chile, for approximately $2 billion.
  • 6The company is progressing with its enterprise-wide strategic initiative targeting $1 billion in efficiencies by 2016.
  • 7Total assets grew to $841.685 billion at March 31, 2013, from $836.781 billion at December 31, 2012.

Frequently Asked Questions

MetLife reported a strong turnaround in the first quarter of 2013, with net income of $986 million, a significant improvement from a net loss of $144 million in the same period of 2012. Operating earnings available to common shareholders also rose to $1.635 billion, up from $1.464 billion in the prior year, driven by higher net investment income and improved derivative results.

The primary drivers were a substantial reduction in net derivative losses, which swung favorably by $1.3 billion, and an improvement in net investment gains (losses) by $424 million. Growth in net investment income due to portfolio expansion and higher asset-based fees also contributed positively.

Yes, MetLife announced a pending acquisition of Provida, Chile's largest private pension fund administrator, for approximately $2 billion. The company also continues to advance its enterprise-wide strategic initiative, aiming for $1 billion in efficiencies by 2016, with a focus on cost reduction, revenue enhancement, and reinvestment in technology and capabilities.

MetLife's investment portfolio, primarily composed of fixed maturity securities and mortgage loans, remained substantial at $374.3 billion and $55.6 billion, respectively. Key risks highlighted include credit risk, interest rate risk, liquidity risk, market valuation risk, currency risk, and real estate risk. The company utilizes diversification, fundamental credit analysis, ALM strategies, and derivatives to manage these risks. Despite a challenging low-interest-rate environment, the company's overall investment performance contributed positively to earnings.