MetLife, Inc. MET reported fourth-quarter 2024 adjusted operating earnings per share (EPS) of $2.08, which missed the Zacks Consensus Estimate by 2.4%. However, the bottom line rose 7.8% year over year.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Adjusted operating revenues of $19.7 billion increased 5.4% year over year. The top line beat the consensus mark by 2.7%.
Weaker-than-expected quarterly earnings were affected by reduced non-medical health underwriting margins in the Group Benefits segment, a decline in recurring interest margin and less favorable underwriting in the Retirement and Income Solutions (RIS) segment, and a decrease in adjusted premiums, fees and other revenues (PFOs) in Asia and Latin America. These headwinds were partially offset by higher investment income and lower expenses.
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. price-consensus-eps-surprise-chart | MetLife, Inc. Quote
Behind the Headlines
Adjusted PFOs, excluding pension risk transfer (PRT), grew 0.3% year over year to $11.8 billion.
Adjusted net investment income of $5.3 billion increased 5% year over year on the back of growth in assets and higher variable investment income.
Total expenses were $17.3 billion, down 4.4% year over year due to lower interest credited to policyholder account balances, policyholder dividends and interest expense on debt. The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, increased 130 basis points year over year to 21.9%.
Net income more than doubled year over year to $1.2 billion. Adjusted return on equity, excluding accumulated other comprehensive income (loss) other than foreign currency translation adjustments, of 15.4%, improved 160 bps year over year.
Inside MetLife’s Segments
Group Benefits: The segment recorded adjusted earnings of $416 million, which declined 11% year over year but outpaced the Zacks Consensus Estimate of $409.5 million. Reduced non-medical health underwriting margins impacted this metric. Adjusted PFOs increased 3% year over year to $6.2 billion.
RIS: Adjusted earnings in the segment declined 8% year over year to $386 million and missed the consensus mark of $427.9 million. The metric was impacted by a decline in recurring interest margin and less favorable underwriting, partially offset by better variable investment income. However, adjusted PFOs, excluding PRT, rose marginally year over year to $1 billion.
Asia: The unit’s adjusted earnings were $443 million, which grew 50% year over year and beat the Zacks Consensus Estimate of $388 million. The metric was aided by favorable underwriting and improved variable investment income. However, adjusted PFOs of $1.6 billion fell 4% year over year.
Latin America: The segment reported adjusted earnings of $201 million, which decreased 3% year over year but increased 10% on a constant currency basis due to expanding volumes. The figure lagged the consensus mark of $222 million. Adjusted PFOs declined 3% year over year to $1.4 billion, attributable to solid sales and persistency rates.
EMEA: In the fourth quarter, adjusted earnings of the segment increased 26% year over year to $59 million, lower than the Zacks Consensus Estimate of $73.3 million. The metric gained from volume growth. Adjusted PFOs of $652 million grew 10% year over year on the back of increasing sales across the region.
MetLife Holdings: The segment’s adjusted earnings declined 2% year over year to $153 million and missed the consensus mark of $172.4 million. The decrease was due to a reinsurance transaction closed in 2023. Adjusted PFOs were $793 million, which declined 10% year over year.
Corporate & Other: The unit incurred an adjusted loss of $199 million, narrower than the prior-year quarter’s loss of $232 million.
Financial Update (As of Dec. 31, 2024)
MetLife exited the fourth quarter with cash and cash equivalents of $20.1 billion, which declined 2.8% from the 2023-end level. Total assets of $677.5 billion fell 1.5% from the 2023-end figure.
Long-term debt totaled $15.1 billion, which declined 3% from the figure as of Dec. 31, 2023. Short-term debt amounted to $119 million.
Total equity of $27.7 billion tumbled 8.4% from the 2023-end level.
Book value per share was $34.28 as of Dec. 31, 2024, down 4.4% year over year.
Capital Deployment Update
MetLife bought back shares worth $0.4 billion in the fourth quarter. It pursued additional repurchases of roughly $470 million in January 2025.
2025 Outlook
Management expects a variable investment income of $1.7 billion for 2025. Corporate & Other adjusted losses are anticipated to be between $850 million and $950 million. The effective tax rate is projected to be 24-26%.
Near-Term Targets
Over the next three years, MetLife projects adjusted PFOs in the Group Benefits business to rise in the range of 4-7%. Adjusted PFOs in the MetLife Holdings segment are anticipated to decrease in the range of 4-6% per year, while the same in the Latin America and EMEA units are forecasted to witness high-single-digit growth and mid to high-single-digit growth, respectively.
MetLife aims to achieve an adjusted return on equity in the range of 15-17%. It is expected to keep the free cash flow ratio in the 65-75% range of adjusted earnings. It expects to achieve double-digit adjusted EPS growth in the near term.
Zacks Rank
MetLife currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter 2024 results so far, the bottom-line results of Marsh & McLennan Companies, Inc. MMC, Brown & Brown, Inc. BRO and AXIS Capital Holdings Limited AXS beat the respective Zacks Consensus Estimate.
Marsh & McLennan reported fourth-quarter 2024 adjusted earnings per share of $1.87, which beat the Zacks Consensus Estimate by 6.9%. The bottom line increased 11% year over year. Consolidated revenues rose 9.4% year over year to $6.1 billion. The figure also improved 7% on an underlying basis. The top line surpassed the consensus mark by 2.5%. Marsh & McLennan’s adjusted operating income was $1.3 billion, up 8.6% year over year. Adjusted operating margin remained unchanged year over year at 23.3%.
Revenues in the Risk and Insurance Services segment were $3.6 billion, which rose 11% year over year and 8% on an underlying basis. Adjusted operating income increased 13% year over year to $893 million. In the United States/Canada operations, revenues grew 21% year over year. Among the international operations, Asia Pacific and EMEA’s revenues grew 9% year over year. The Consulting unit recorded revenues of $2.44 billion, which increased 6% year over year and 6% on an underlying basis.
Brown & Brown’s fourth-quarter 2024 adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 48.3% year over year. Total revenues of $1.2 billion beat the consensus estimate by 6.4%. The top line improved 15.4% year over year. The upside can be primarily attributed to commission and fees, which grew 15.4% year over year to $1.1 billion.
Organic revenues improved 13.8% to $1.1 billion. Investment income increased 22.2% year over year to $22 million. Adjusted EBITDAC was $390 million, up 22.6% year over year. EBITDAC margin expanded 190 bps year over year to 32.9%.
AXIS Capital posted fourth-quarter 2024 operating income of $2.97 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 1% year over year. Total operating revenues of $1.6 billion missed the consensus estimate by 2.8%. The top line rose 6.7% year over year. Net premiums written increased 14% to $1.2 billion, attributable to a 9% increase in the Insurance segment and a 64% surge in the Reinsurance segment. Net investment income increased 5% year over year to $195.8 million.
AXIS Capital’s underwriting income was $129.5 million against a loss of $274 million in the year-ago quarter. The combined ratio improved 3040 bps to 94.2%. The Insurance segment’s gross premiums written improved 7.4% year over year to $1.7 billion. Net premiums earned increased 11.9% to $1 billion. In the Reinsurance unit, gross premiums written increased 36.9% year over year to $275 million. Underwriting income was $0.4 million against a loss of $212.4 million in the year-ago quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
