BOSTON (AP) — Shares of MetLife Inc. surged on Friday after the nation's largest life insurer reported second-quarter earnings that exceeded analysts' expectations.
THE SPARK: MetLife said after markets closed Thursday that its second-quarter net income available to common shareholders fell 21 percent, as claims and expenses rose due to storms and the disasters in Japan. But the company's operating earnings of $1.24 per share easily beat Wall Street's consensus forecast for $1.13 per share, according to FactSet. MetLife collected higher premiums, with strong sales gains for products such as variable annuities. MetLife also reported a 25 percent jump in international sales, largely due to its Nov. 1 acquisition of Alico, the international life insurance company bought from bailed-out rival American International Group Inc.
THE BIG PICTURE: MetLife is the nation's largest life insurer, and has global operations. It also sells other lines of insurance including auto, home, dental, disability and long-term care.
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THE ANALYSIS: Analysts' reports to investors on Friday cited several positives in MetLife's earnings. Colin Devine of Citi Investment Research said results from MetLife's recently acquired Alico international insurance businesses "enhanced an already formidable earnings platform." He called MetLife's international results "impressive" despite the negative impact from disasters in Japan.
Randy Binner of FBR Capital Markets cited favorable mortality trends, strong variable annuity profit margins, and solid results from MetLife's dental insurance and corporate benefits segments. Sterne Agee analyst John Nadel raised his full-year earnings forecast to $5.25 per share, up from his prior forecast of $4.96 per share, calling MetLife's second-quarter underwriting results "exceptional." Analysts surveyed by FactSet expect earnings $5.16 per share, on average.
SHARE ACTION: Shares of MetLife rose $1.45, or 3.6 percent, to $41.26 in afternoon trading. The stock has traded in a 52-week range of $35.38 to $48.72.
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