10-QPeriod: Q1 FY2019

METLIFE INC Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 8, 2019For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. reported solid financial results for the first quarter of 2019. The company saw a notable increase in net income available to common shareholders, rising to $1.349 billion from $1.253 billion in the prior year's quarter, driven primarily by favorable changes in net investment gains and losses. Total revenues grew to $16.3 billion, an increase from $14.8 billion year-over-year, supported by higher premiums and a significant increase in net investment income. Adjusted earnings, a key non-GAAP metric used by management, remained stable year-over-year at approximately $1.4 billion. This stability, despite market volatility and increased interest credited expenses, highlights the company's effective risk management and operational efficiencies. MetLife continued its share repurchase program, demonstrating a commitment to returning capital to shareholders, and maintained a strong capital position, adhering to regulatory requirements across its diverse global operations.

Financial Highlights

36 data points
Beta

Revenue

$16.30B

Net Income

$1.39B

8.5% Net Margin

EPS (Diluted)

$1.40

Total Assets

$713.19B

Cash & Equivalents

$14.51B

Free Cash Flow

$2.07B

Financial Statements
Beta
Revenue$16.30B
Operating Expenses$3.23B
Net Income$1.39B
EPS (Basic)$1.41
EPS (Diluted)$1.40
Shares Outstanding (Basic)956.50M
Shares Outstanding (Diluted)963.30M

Key Highlights

  • 1Net income available to MetLife, Inc.'s common shareholders increased by $96 million to $1.349 billion for the three months ended March 31, 2019, compared to $1.253 billion for the same period in 2018.
  • 2Total revenues for the first quarter of 2019 rose to $16.302 billion, up from $14.805 billion in the prior year's quarter.
  • 3Net investment income increased significantly to $4.908 billion from $3.745 billion year-over-year.
  • 4Net investment gains (losses) improved dramatically from a loss of $333 million in Q1 2018 to a gain of $15 million in Q1 2019.
  • 5Net derivative gains (losses) decreased to $115 million in Q1 2019 from $349 million in Q1 2018.
  • 6MetLife repurchased $500 million of its common stock during the quarter.
  • 7The company reported a substantial increase in Accumulated Other Comprehensive Income (AOCI) due to unrealized investment gains, moving from $1.722 billion at the end of 2018 to $6.911 billion at March 31, 2019.

Frequently Asked Questions

MetLife's profitability showed improvement, with net income available to common shareholders increasing by $96 million to $1.349 billion in the first quarter of 2019 compared to $1.253 billion in the same period of 2018. This increase was primarily driven by a favorable change in net investment gains and losses and an increase in net investment income, partially offset by a decrease in net derivative gains.

The significant increase in net investment income was largely due to higher average invested assets, driven by positive net flows from many of MetLife's businesses. This was further supported by improved investment yields on mortgage loans, fixed income securities, FVO securities, and derivatives, despite some offsetting factors like lower returns on private equities and real estate investments.

MetLife actively uses derivatives to manage various risks, including interest rate, foreign currency exchange rate, credit, and equity market risks. While some hedging strategies qualify for hedge accounting, reducing earnings volatility, others do not. For non-qualified hedges, changes in market factors are recognized in net derivative gains (losses) without an immediate offsetting gain or loss on the hedged item, which can cause earnings volatility. The company actively manages these strategies to align with its free cash flow and capital objectives.

MetLife continued its commitment to returning capital to shareholders by repurchasing $500 million of its common stock during the first quarter of 2019. The company also declared and paid common stock dividends of $405 million during the quarter.