MetLife (MET) Q3 2024 earnings summary

Executive summary

• Q3 net income rose to $1.3 billion ($1.81/share), up sharply from $422 million, driven by net derivative gains but offset by market risk benefit remeasurement losses.

• Adjusted earnings were $1.4 billion ($1.95/share), down 8% year-over-year, with adjusted EPS nearly flat at -1% year-over-year.

• Book value per share increased 33% to $39.02; book value excluding AOCI other than FCTA rose 3% to $54.72.

• Return on equity was 20.2%; adjusted ROE excluding AOCI other than FCTA was 14.6%, above the full-year target.

• Holding company cash and liquid assets stood at $4.5 billion, above the $3-4 billion target buffer.

Financial highlights

• Total Q3 revenues were $18.4 billion, up from $15.9 billion; net investment income increased to $5.2 billion, with variable investment income declining due to lower private equity returns.

• Premiums, fees, and other revenues were $12.5 billion, down 5% year-over-year; adjusted net investment income was $5.1 billion, up 2%.

• Direct expense ratio improved to 11.7%, below the 12.3% annual target; overall expense ratio increased to 19.9%.

• Share repurchases totaled $0.8 billion in Q3, with $2.8 billion repurchased YTD and $130 million in October.

• Net investment gains and derivative gains improved, but market risk benefit remeasurement losses increased by $1.3 billion.

Outlook and guidance

• Q4 RIS spreads expected to stabilize, with most interest rate caps now expired; direct expense ratio expected to rise in Q4 due to seasonality but full-year performance should beat the 12.3% target.

• Management expects continued volatility from global economic and market conditions, including interest rate changes and inflation.

• Asia full-year sales expected to be close to flat year-over-year; ROE expected to trend upwards as high-IRR businesses grow.

• Quarterly target for variable investment income is $375 million, based on full-year 2024 guidance of ~$1.5 billion.

• Management remains focused on expense discipline and capital deployment.