MetLife Reveals Mixed Q3 2024 Results, Awaits New Boundary Strategy

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MetLife Reveals Mixed Q3 2024 Results, Awaits New Boundary Strategy

MetLife, Inc. (MET) reported adjusted earnings of $1.4 billion, or $1.93 per share, in the third quarter of 2024, showing a decline compared to the previous year. Despite decreases in variable investment income and recurring interest margins, the company saw a 12% increase in year-to-date adjusted earnings per share (EPS) when excluding notable items.

U.S. market conditions, including low unemployment and controlled inflation, were favorable for the company's Group Benefits and Retirement and Income Solutions segments. Following a year highlighted by strategic capital distribution and shareholder returns, MetLife is preparing to launch its New Frontier strategy on December 12, 2024, aiming to accelerate growth and enhance returns.

Key Points:

  • MetLife's Q3 2024 adjusted earnings were $1.4 billion, with earnings per share of $1.93.
  • U.S. market conditions supported the company's Group Benefits and Retirement and Income Solutions segments.
  • Adjusted earnings for Group Benefits were reported at $431 million, while Retirement and Income Solutions were $368 million.
  • Adjusted earnings in Asia fell to $347 million, while Latin America rose 9% to $217 million.
  • The company has a strong liquidity position with $4.5 billion in cash and liquid assets.
  • MetLife's New Frontier strategy will be unveiled on December 12, 2024.

Company Outlook: MetLife is poised to present its New Frontier strategy, aimed at accelerating growth and enhancing returns. The company anticipates a strong pipeline for future retirement risk transfer opportunities. The short-term outlook will be detailed during the Q4 2024 earnings call in February.

Negative Highlights:

  • The Group Benefits and Retirement and Income Solutions segments experienced declines in adjusted earnings.
  • Adjusted earnings in Asia decreased by 6% due to market-related factors.
  • Total U.S. legal adjusted capital decreased by 2% from the previous quarter.

Positive Highlights:

  • Despite challenges, the company reported a 12% increase in year-to-date adjusted EPS when excluding notable items.
  • Adjusted earnings in Latin America increased by 9%.
  • The company maintained a strong liquidity position and returned $1.2 billion to shareholders.

Misses:

  • Adjusted earnings per share fell 8% year-over-year to $1.93.
  • Group Benefits' adjusted earnings dropped 11% due to less favorable health insurance margins.
  • Retirement and Income Solutions witnessed a 10% decline in adjusted earnings.

Q&A Highlights: Management noted a competitive environment in Group Benefits but expects to return to target margins by 2025. New products have been launched to maintain competitive strength in Japan and Asia, with overall sales in Asia increasing by 9%. The company is cautiously optimistic about commercial mortgage performance with a stable credit portfolio and modest expected losses.

In conclusion, MetLife's Q3 2024 earnings report reflects a company navigating a complex market environment with strategic focus and disciplined capital management. Despite facing some challenges, MetLife positions itself for future growth with the upcoming New Frontier strategy and continues to provide value to its shareholders. Details of the strategy and further financial outlook will be eagerly awaited at the Investor Day on December 12 and during the Q4 earnings call in February.

InvestingPro Insights: MetLife's recent performance and strategic positioning are further illuminated by data from InvestingPro. The company's market capitalization stands at $55.11 billion, reflecting its significance in the insurance sector. MetLife's P/E ratio of 21.28 indicates that investors are willing to pay a premium for its earnings, likely driven by a strong market position and growth expectations.

InvestingPro tips highlight MetLife's commitment to shareholder returns, with the company having increased its dividend for 12 consecutive years and maintained consecutive dividend payments for 25 years. This aligns with the reported $1.2 billion returned to shareholders. The current dividend yield of 2.62% provides an attractive income stream for investors.

The company’s financial health is underscored by InvestingPro data showing $68.77 billion in revenue over the past twelve months. Although revenue growth has been slightly negative at -1.61%, a quarterly revenue growth of 7.22% indicates a potential turnaround, which could be further accelerated by the anticipated New Frontier strategy.

MetLife's profitability is evident from its $15.39 billion in gross profit and $4.25 billion in EBITDA over the past twelve months. The 15.33% EBITDA growth is particularly noteworthy, demonstrating improved operational efficiency despite the challenges mentioned in the earnings report.

Investors may find reassurance in the fact that MetLife's liquid assets exceed its short-term liabilities, confirming the company's strong liquidity position, as stated in the article about its $4.5 billion in cash and liquid assets.

Looking ahead, InvestingPro tips indicate expectations for an increase in net income this year, which could support the company's strategic initiatives and shareholder returns. However, it’s worth noting that nine analysts have revised earnings forecasts downward for the upcoming period, indicating some caution in short-term expectations.

For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and metrics beyond what is presented here. In fact, there are 11 more InvestingPro Tips available for MetLife, providing deeper insights into the company’s financial health and market position.