10-QPeriod: Q3 FY2019

METLIFE INC Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 5, 2019For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife Inc. reported strong financial results for the third quarter and the first nine months of 2019. Net income available to common shareholders more than doubled in the third quarter to $2.15 billion, up from $880 million in the prior year period, driven by significant gains in net derivative results. For the nine months, net income available to common shareholders was $5.19 billion, a substantial increase from $2.97 billion in the same period last year. Adjusted earnings, a non-GAAP measure used by management, showed a decrease in the third quarter compared to the prior year, primarily due to unfavorable actuarial assumption reviews and underwriting results. However, for the nine-month period, adjusted earnings saw a substantial increase, also largely driven by favorable derivative results. The company's total assets grew to $742.8 billion at September 30, 2019, up from $687.5 billion at December 31, 2018. This growth was supported by increases in investments and cash, reflecting positive net flows in the investment portfolio. The balance sheet remains robust, with total liabilities also increasing but being well-covered by assets. MetLife continued its commitment to shareholder returns through common stock repurchases, totaling $2.0 billion for the first nine months of 2019, and dividend payments. The company's capital management strategy remains focused on maintaining financial strength and credit ratings.

Financial Highlights

36 data points
Beta

Revenue

$18.68B

Net Income

$2.19B

11.7% Net Margin

EPS (Diluted)

$2.30

Total Assets

$742.81B

Cash & Equivalents

$19.45B

Free Cash Flow

$4.15B

Financial Statements
Beta
Revenue$18.68B
Operating Expenses$3.44B
Net Income$2.19B
EPS (Basic)$2.31
EPS (Diluted)$2.30
Shares Outstanding (Basic)929.60M
Shares Outstanding (Diluted)936.40M

Key Highlights

  • 1Net income available to common shareholders significantly increased in Q3 2019 to $2.15 billion, driven by favorable derivative results.
  • 2Total assets grew to $742.8 billion by September 30, 2019, up from $687.5 billion at year-end 2018.
  • 3Adjusted earnings decreased in Q3 2019 compared to the prior year due to actuarial assumption reviews and underwriting, but increased significantly for the nine-month period.
  • 4The company returned $2.0 billion to shareholders through common stock repurchases in the first nine months of 2019.
  • 5MetLife's investment portfolio remains diversified, with a strong focus on fixed-income securities, and management is actively hedging market risks using derivatives.
  • 6The company is subject to various litigation and regulatory matters, but management believes that adequate provisions have been made for probable and reasonably estimable losses.
  • 7MetLife continues to focus on its core businesses and markets where it can achieve scale, with an ongoing emphasis on cost reduction and digital transformation.

Frequently Asked Questions

MetLife's net income available to MetLife, Inc.'s common shareholders for the third quarter of 2019 was $2,152 million, or $2.30 per diluted share, a significant increase from $880 million, or $0.88 per diluted share, in the same period of 2018.

MetLife's investment portfolio saw an increase in net investment income to $4.623 billion for Q3 2019, up from $4.486 billion in Q3 2018. This was driven by higher yields in certain areas and positive net flows, although overall yields on fixed income securities declined.

MetLife's performance is materially affected by global capital markets and the economy. The company is monitoring political and economic conditions that contribute to market volatility, including interest rate policies of central banks and Brexit impacts. While sustained low interest rates present challenges, MetLife employs various strategies, including derivative hedging, to mitigate risks.

MetLife has entered into a definitive agreement to sell its two wholly-owned subsidiaries in Hong Kong. The transaction is expected to close in 2020 and is subject to regulatory approvals and other closing conditions. A loss of $140 million, net of tax, was recorded for the nine months ended September 30, 2019, related to this disposition.