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MetLife Sees Earnings Below Wall Street Estimates

Reuters
Monday, 3 Dec 2007 | 11:15 AM ET

MetLife,the largest U.S. life insurer, Monday forecast fourth-quarter and 2008 earnings below analysts' expectations, sending its shares down as much as 3.4 percent.

The company also said it expects a 13 percent to 13.6 percent operating return on equity in 2008, down from 14.6 percent to 14.7 percent this year. It set a goal of 15 percent by the end of 2010.

MetLife said it expects operating profit per share of $1.40 to $1.45 for the fourth quarter and $5.90 to $6.20 for 2008.

Analysts on average expected $1.44 for the fourth quarter and $6.30 for 2008, according to Reuters Estimates.

The insurance company said it expects to buy back $2.2 billion of stock in 2008. MetLife, which expects to have $3 billion in cash in 2008, said it will also consider making acquisitions.

Operating earnings were $1.36 per share in the fourth quarter of 2006 and $5.21 per share for the full year.

MetLife expects revenue of $34.8 billion to $35.2 billion for 2007, and $37.7 billion to $38.7 billion for 2008, according to a regulatory filing.

MetLife had $204 million of unrealized losses on an "Alt-A" and subprime mortgage portfolio as of Oct. 31, the filing shows. The portfolio totaled $8.83 billion as of Sept. 30 and included $6.58 billion of Alt-A residential mortgage-backed debt, $2.18 billion of subprime mortgages, and $62 million of collateralized debt obligations related to subprime mortgages.

Many companies have suffered losses on below-prime mortgages as the U.S. housing market has deteriorated.

In morning trading, MetLife shares were down $1.33 to $64.26 after falling as low as $63.36 earlier in the session.

Through Friday, the shares had risen 11 percent this year, compared with a 7 percent drop in the Standard & Poor's insurance index.

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