10-QPeriod: Q3 FY2018

METLIFE INC Quarterly Report for Q3 Ended Sep 30, 2018

Filed November 8, 2018For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. (MET) reported its financial results for the period ending September 29, 2018. The company experienced a significant increase in net income available to common shareholders, driven primarily by a favorable change in discontinued operations and an improvement in net investment gains. Adjusted earnings, a non-GAAP measure that management uses to assess performance, also saw a substantial increase year-over-year, benefiting from higher net investment income, the positive impact of U.S. Tax Reform, and favorable underwriting. While overall sales saw a slight decrease compared to the prior period, MetLife demonstrated resilience across its diverse segments. The company's investment portfolio, which is heavily weighted towards fixed income securities, experienced improved yields. MetLife also continued its share repurchase program, signaling confidence in its financial position and commitment to returning capital to shareholders. Investors should note the ongoing impact of actuarial assumption reviews and the company's proactive management of market risks through hedging strategies.

Financial Highlights

38 data points
Beta

Revenue

$16.29B

Net Income

$915.00M

5.6% Net Margin

EPS (Diluted)

$0.88

Total Assets

$698.45B

Cash & Equivalents

$12.49B

Free Cash Flow

$3.53B

Financial Statements
Beta
Revenue$16.29B
Operating Expenses$3.47B
Operating Income$2.97B
Net Income$915.00M
EPS (Basic)$0.89
EPS (Diluted)$0.88
Shares Outstanding (Basic)992.70M
Shares Outstanding (Diluted)1.00B

Key Highlights

  • 1Net income available to common shareholders increased significantly to $880 million for the three months ended September 30, 2018, compared to a loss of $97 million in the prior year period. This was largely driven by favorable changes in discontinued operations and net investment gains.
  • 2Adjusted earnings available to common shareholders increased by $261 million to $1.4 billion for the three months ended September 30, 2018, reflecting improved net investment income, the positive impact of U.S. Tax Reform, and favorable underwriting.
  • 3Total revenues for the three months ended September 30, 2018 were $16.3 billion, a slight increase from $16.2 billion in the prior year period.
  • 4Total expenses decreased to $15.2 billion for the three months ended September 30, 2018, from $15.7 billion in the prior year period.
  • 5MetLife repurchased 14,062,526 shares of its common stock during the quarter ended September 30, 2018, under its authorized share repurchase programs.
  • 6The company had total assets of $698.45 billion at September 30, 2018, a decrease from $719.89 billion at December 31, 2017.
  • 7MetLife reported $51.6 billion in stockholders' equity at September 30, 2018, a decrease from $58.9 billion at December 31, 2017, impacted by accumulated other comprehensive income changes and common stock repurchases.

Frequently Asked Questions

MetLife's net income available to common shareholders for the three months ended September 30, 2018, was $880 million, a significant improvement from a net loss of $97 million in the same period of the prior year. This increase was primarily driven by favorable changes in discontinued operations and net investment gains.

Adjusted earnings available to common shareholders increased by $261 million to $1.4 billion for the three months ended September 30, 2018, compared to $1.1 billion in the prior year period. Key drivers included higher net investment income, the positive impact of U.S. Tax Reform, and favorable underwriting, partially offset by higher interest credited expenses and unfavorable actuarial assumption reviews.

As of September 30, 2018, MetLife had total assets of $698.45 billion, a decrease from $719.89 billion at the end of 2017. Total stockholders' equity was $51.6 billion, down from $58.9 billion at year-end 2017, influenced by changes in accumulated other comprehensive income and share repurchases.

MetLife employs disciplined asset/liability management (ALM) principles to manage its investment portfolio, focusing on matching cash flows and duration to liabilities. The company uses derivatives extensively to hedge risks related to interest rates, foreign currency exchange rates, credit, and equity markets. A significant portion of their hedging strategies are not designated as accounting hedges, which can lead to volatility in earnings.