Financial stock to watch: Metlife Inc (NYSE: MET)

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Metlife Inc (NYSE: MET) stock fell over 7.3% on 7th May, 2020 (As of 12:13 pm GMT-4; Source: Google finance) after the company posted decent results for the first quarter of FY 20 with earnings driven by investment growth and strong underwriting in some of the company’s U.S. businesses. The company reported an 8% increase for adjusted earnings in its U.S. business, to $780 million from $724 million, which helped to compensate for quarterly losses in MetLife’s international units. Further, the results were also driven by a 26% rise in profit from retirement and income solutions to $359 million, on the back of favorable variable investment income and volume growth. Overall the company has delivered 2% increase in the adjusted earnings to $1.4 billion, and up 4 percent on a constant currency basis, from the first quarter of 2019.

MET in the first quarter of FY 20 has reported the adjusted earnings per share of $1.58, beating the analysts’ estimates for the adjusted earnings per share of $1.45, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 35.9 percent to $15.54 billion in the first quarter of FY 20, missing the analysts’ estimates for revenue by 7.02%.  MetLife reported first quarter 2020 adjusted premiums, fees and other revenues were $11.2 billion, which were flat from the prior-year period, and up 1 percent on a constant currency basis. The adjusted net investment income was up 1 percent to $4.3 billion from the prior-year period. Net derivative gains were of total $4.2 billion, or $3.3 billion after tax during the first quarter, due to lower interest rates. The adjusted earnings for Property & Casualty were up 12 percent to $109 million, due to favorable underwriting and expense margins.

Moreover, the adjusted earnings for Asia were down 2 percent to $350 million, and flat on a constant currency basis, as volume growth was offset by less favorable underwriting, unfavorable equity markets and lower investment margins. The Sales for Asia were down 26 percent on a constant currency basis to $507 million, mainly due to lower sales in China and Japan.  Adjusted earnings for Latin America were down 29 percent to $95 million, and down 19 percent on a constant currency basis, due to lower equity markets impacting Chilean encaje returns. The sales for Latin America were up 27 percent to $258 million on a constant currency basis, due to higher group sales in Chile, Mexico and Brazil.  The adjusted earnings for EMEA were down 9 percent to $78 million, and down 6 percent on a constant currency basis.

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