MetLife,the largest life insurer in he United States by assets, said on Thursday first-quarter net income fell 37 percent, hurt by investment losses.
Net earnings fell to $615 million, or 84 cents a share, from $983 million, or $1.28 a share, in the year earlier quarter. MetLife recorded net realized after tax investment losses of $560 million including $150 million in credit-related losses.
Excluding the losses, operating earnings rose to $1.11 billion, or $1.52 a share, from $1.08 billion, or $1.41 a share. On that basis, analysts, on average, expected $1.48 a share, according to Reuters Estimates.
"Despite the challenges posed by the credit and equity markets, we continued to execute well on our plans," said Chief Executive C. Robert Henrikson, in a statement.
Smaller rival Prudential Financial posted a 92 percent drop in
net earnings on Wednesday, as market investments plunged amid the credit crunch. Prudential also posted lower operating earnings.
New York-based MetLife did not provide more details on the source of the losses. Other insurers, including Prudential, have been hurt by exposure to risky subprime mortgage bets.
Morningstar analyst Alan Rambaldini expected MetLife to record some realized investment losses, given market conditions, but he said he was surprised at their extent, especially credit-related losses.
"Operating results were pretty good," said Rambaldini, noting MetLife's robust premium growth.
The company reported 12 percent growth in premiums, fees and other revenue to a record $9.4 billion. Total revenue, including investment income and realized losses, climbed about 1 percent to $13 billion from a year ago.
Operating earnings from its institutional business were up 23.5 percent to $558 million, while retirement and savings income rose 21 percent.
Individual business operating income fell to $312 million from $319 million, and annuity operating profit declined to $167 million from $210 million, dented by the impact of volatile equity markets on variable annuity results.