MetLife Shares Dive After Earnings Miss Forecasts

MetLife, the largest life insurer in the United States, said on Tuesday its second-quarter profit fell as investments took a hit, missing Wall Street expectations and sending shares down nearly 10 percent.


Net earnings dropped about 19 percent to $915 million, or $1.26 a share, as catastrophe losses also took a hit on its homeowners business.

MetLife recorded profit of $1.13 billion, or $1.48 a share, in the year-ago period.

Operating income, which excludes realized investment gains or losses, fell 27.5 percent to $942 million, or $1.30 a share.

Analysts, on that basis, expected earnings of $1.51 a share, according to Reuters Estimates.

MetLife shares fell to $47.60 in post-market trading after closing up 5 percent in the regular session to $52.81.

MetLife recorded net realized investment losses of $233 million in the quarter, three-quarters of which were related to the credit crisis that has roiled markets.

Net investment income was 5 percent lower at $4.58 billion.

MetLife cut its full-year earnings outlook due to the performance of equity markets in the quarter. It now sees operating earnings of $5.70 to $5.90 a share, lowered from its previous view of $5.90 to $6.20 a share.

Analysts on average expected MetLife to earn $6.16 a share in 2008 operating profit.

The New York -based company reported 10 percent growth in premiums and fees.

Total revenue, including investment income and realized losses, climbed nearly 4 percent to $13.7 billion from a year ago.

However, MetLife posted lower earnings in several lines of business, including income from its auto and home division being more than halved to $52 million, due to unusually high losses from disasters, such as tornadoes and hailstorms, that wreaked havoc across parts of the United States earlier this year.