MetLife Profit Surges as U.S. Shines; Prudential Misses Estimate

(Bloomberg) -- MetLife Inc.'s U.S. business propelled profits in the second quarter as the insurer beat expectations and announced a new plan to buy back $2 billion in shares. Prudential Financial Inc. earnings fell short of estimates.

• MetLife's adjusted earnings climbed 6% to $1.38 a share, surpassing the $1.34 estimate of 17 analysts surveyed by Bloomberg. Its rival Prudential turned in a profit of $3.14 a share, missing the $3.23 forecast.

Key Insights

• MetLife's U.S. business continued to be a standout as profit rose 9% from a year earlier, boosted by growing volume, lower expenses and favorable underwriting, MetLife said Wednesday in a statement. Earnings in the U.S. group-benefits division surged 19%.
• Latin American profits climbed 10%, driven by capital markets and rising volume, while Europe, the Middle East and Africa declined 10%.
• The firm has about $20 million left under a $2 billion repurchase authorization announced in November, it said in a separate statement. In the first half, MetLife returned about $2 billion to shareholders via stock buybacks and dividends.
• Prudential's overall results include an after-tax charge of $32 million from annual reviews and an update of its mortality assumptions.
• Its individual life division swung to an adjusted operating loss of $135 million, versus a profit of $43 million a year earlier. The decline “includes a more unfavorable comparative impact from our annual reviews and update of assumptions and other refinements of $153 million.” Worse underwriting and higher expenses also weighed on the results.
• Assets under management for PGIM, Prudential's investment-management business, rose 9% to $1.260 trillion, boosted by market appreciation and fixed income inflows.

Market Reaction

• MetLife fell 1.2% in regular trading to $49.42 and has risen 20% this year.
• Prudential dropped 3.3% to $98 after the U.S. market close. It fell 1% to $101.31 in regular trading and has risen 24% so far in 2019.

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• “MetLife had another strong quarter driven by business growth, favorable underwriting and expense discipline,” MetLife Chief Executive Officer Michel Khalaf said in the earnings statement.
• “Although the recent decline in interest rates and our revised mortality assumptions may trim near-term earnings momentum, we remain confident in our planned initiatives for growth,” Prudential CEO Charles Lowrey said a statement.
• For details on MetLife's results, click here.
• For details on Prudential's results, click here.

To contact the reporter on this story: Lananh Nguyen in New York at lnguyen35@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Daniel Taub

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