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MetLife Announces 2010 Guidance & Expected 2009 Financial Results

Posted by Dana in December 9th 2009

MetLife, Inc. (NYSE:MET) announced several financial targets for 2010 as well as its expected results for the fourth quarter and full year 2009.

2010 Projections & Guidance
MetLife’s 2010 operating earnings projection does not reflect an anticipated charge of $30 million ($0.04 per share), after income tax, related to MetLife’s Operational Excellence initiative, which is focused on reducing complexity, increasing productivity, accelerating growth and improving the effectiveness of the company’s operations.

Estimated Fourth Quarter & Full Year 2009 Revenue
Premiums, fees & other revenues for the fourth quarter of 2009 are expected to be between $8.5 billion and $9.1 billion, up approximately 7% from $8.2 billion in the fourth quarter of 2008. For the full year 2009, premiums, fees & other revenues are expected to be between $33.2 billion and $33.8 billion, up approximately 2% from $32.9 billion in 2008.

Estimated Fourth Quarter & Full Year 2009 Operating Earnings
For the fourth quarter of 2009, MetLife expects to report operating earnings between $740 million and $785 million ($0.90 to $0.95 per share), up significantly from $132 million ($0.17 per share) in the fourth quarter of 2008.

MetLife’s fourth quarter and full year 2009 operating earnings expectations do not reflect the annual review of assumptions related to deferred acquisition costs and other adjustments. This review will be finalized later in the fourth quarter and is anticipated to have a positive impact on both fourth quarter and full year 2009 results.

MetLife’s full year 2008 operating earnings were $2.7 billion ($3.62 per share).

Estimated Fourth Quarter & Full Year 2009 Net Income
For the fourth quarter of 2009, MetLife expects net income to be between $340 million and $485 million ($0.41 to $0.59 per share), compared with $954 million ($1.20 per share) in the fourth quarter of 2008. Fourth quarter 2008 net income benefited from net realized investment gains, after income tax, of $1.4 billion, of which approximately $1.7 billion, after income tax, were due to derivative gains.

MetLife uses derivatives – in connection with its broader portfolio management strategy – to hedge a number of risks, including changes in interest rates and fluctuations in foreign currencies. Movement in interest rates, foreign currencies and MetLife’s own credit spread – which impacts the valuation of certain insurance liabilities – can generate derivative gains or losses.

The derivative losses related to MetLife’s own credit spread do not have an economic impact on the company, but are reflected in MetLife’s net income. During the first nine months of 2009, for example, an average 350 basis point improvement in MetLife’s own credit spread contributed approximately $1 billion, after income tax, to derivative losses of $2.6 billion, after income tax. Therefore, MetLife expects a full year 2009 net loss between $2.2 billion and $2.3 billion ($2.64 to $2.82 per share).