MetLife's Q4 Offers Positives Amid Pockets Of Concern

Shares of Metlife Inc MET fell more than 5 percent as its fourth-quarter results were weighed down by a $3.2 billion derivative loss, leading to a quarterly loss of $2.1 billion compared to a profit of $785 million a year-ago.

The company blamed the huge derivative loss to rising interest rates that reduced the carrying value of its derivatives book.

Adjusted earnings of the insurer, which announced plans to spin off the U.S. retail unit by first half of this year, also missed Street view.

Analyst's Take

Meanwhile, Yaron Kinar of Deutsche Bank maintains his Buy rating on the stock and highlighted the positives and negatives of the print:

• Premium, fee and other (PFO) revenue growth remains robust in U.S. group.
• RIS earnings were better than Deutsche Bank's estimates on strong underwriting and robust PRT volume.
• LatAm and EMEA posted solid normalized results.
• EMEA normalized constant currency earnings were up 36 percent due to volume growth.

Negatives:

• $3.2 billion derivative loss. Kinar said these losses adversely impact book value per share ex. AOCI (accumulated other comprehensive income), which was down 3 percent year-over-year.
• Constant currency Asia earnings improved 8 percent, but were flat when adjusting for the tax reversal this quarter.

Kinar, who termed the results as “another noisy quarter,” has a price target of $65 on the shares.

At last check, shares of MetLife had fallen 5.16 percent on the day to $51.14.