MetLife profit rises 63% to $2.16 billion on derivatives

MetLife Inc., the largest U.S. life insurer, said first-quarter profit rose 63 percent on derivative gains and improved results at the operation that sells group policies and coverage through workplaces.

Net income advanced to $2.16 billion from $1.33 billion a year earlier, according to a statement Wednesday by New York-based MetLife, which has a hub in Ballantyne Corporate Park. Operating profit, which excludes some investing results, was $1.44 a share, beating the $1.41 average estimate in a Bloomberg survey of 16 analysts.

“Met has recently taken steps to improve capital return and improve free cash flow, which we see as a tailwind for the stock in the long run,” Thomas Gallagher, an analyst at Credit Suisse Group AG, wrote in a note to clients before earnings were released.

MetLife said last month it has reached its goal of creating more than 1,300 jobs at its U.S. retail headquarters in Charlotte.

The company has been focusing on products like dental insurance and disability coverage after scaling back from some capital- intensive products like variable annuities, where results can be more tied to fluctuations in financial markets. The workplace- benefits operation is part of the Americas unit led by Bill Wheeler, who is slated to leave the company in August.

Wheeler, the former chief financial officer, also helped integrate American Life Insurance Co., which MetLife bought for about $16 billion in 2010. He also worked with Chief Executive Officer Steve Kandarian to expand in Latin American nations including Chile.

MetLife declined 0.6 percent to $51.78 at 4:07 p.m. in New York. It has slipped 4.3 percent this year, compared with the 7.5 percent fall of Prudential Financial Inc., the No. 2 U.S. life insurer. Results were released after the close of regular trading.

Prudential said Wednesday that quarterly profit rose 66 percent to $2.04 billion. Operating income at the Newark, New Jersey-based insurer was $2.79 a share, beating the $2.39 average estimate of 16 analysts surveyed by Bloomberg.

MetLife’s operating investment income slipped 2 percent to $4.98 billion on lower gains from alternative holdings, a group that includes private-equity bets.

Book value, a measure of assets minus liabilities, rose to $64.37 a share from $61.85 three months earlier. MetLife recorded $534 million in gains tied to derivatives, reflecting the weakening of foreign currencies and lower interest rates.

Operating earnings at the Americas unit, MetLife’s largest, rose 4.3 percent to $1.38 billion. The figure at the segment selling workplace coverage climbed 20 percent to $228 million.

This story was originally published May 6, 2015 at 5:02 PM with the headline "MetLife profit rises 63% to $2.16 billion on derivatives."