Earnings Preview: MetLife 3Q profit seen improving

posted: 28 DAYS 21 HOURS AGO

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NEW YORK -MetLife Inc. reports earnings for the third quarter on Thursday after the market closes. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Like other insurers, MetLife has seen its investment portfolio take a beating this year as the housing market deteriorated and the stock market plunged.

The New York-based insurer lost $1.43 billion, or $1.74 per share, in the second quarter due to massive losses in its investment portfolio. It marked back-to-back quarterly losses for MetLife.

Life insurers make money by investing premiums before they must pay out when policyholders die or begin collecting on annuities.

But the market turmoil at the end of last year and the beginning of this year saddled the insurers with losses instead of profits.

Analysts are expecting things to look a little brighter in the third quarter as the financial markets improved. The Standard & Poor's 500 index, the broadest stock market indicator, rose nearly 15 percent in the July-September period.

BY THE NUMBERS: Analysts project earnings of 87 cents per share on revenue of $12.25 billion, according to a survey by Thomson Reuters. In the third quarter of last year, the insurer earned 83 cents per share on revenue of $13.38 billion.

ANALYST TAKE: Raymond James analyst Steven Schwartz said in a note last month that he believes MetLife's fundamental operating outlook is "outstanding."

"The company enjoys a strong investment portfolio, a leading brand name and what we believe will prove to be a substantial capital cushion," he wrote in a note to investors.

WHAT'S AHEAD: MetLife announced in July plans to combine several business units into a single organization, following a two-year-long strategic review.

The company said its institutional and individual businesses would be merged, along with its auto and home unit.

The changes were effective Aug. 1 and the integration is expected to be completed next year.

STOCK PERFORMANCE: During the third quarter, MetLife shares gained 26.9 percent. The stock is roughly unchanged for the year, closing Tuesday at $34.97.

2009-10-28 12:58:41