This summary is based on the second quarter fiscal 2008 earnings call conducted by MetLife Inc. (MET) on July 30, 2008.
Management:
President, Chairman and CEO: Robert C. Henrikson
EVP and CFO: William J. Wheeler
EVP and CIO: Steven A. Kandarian
President, Institutional Business: William J. Mullaney
President, International: William J. Toppeta
IR: Conor Murphy
Key Investor Issues:
- Half year net income was $1,530 million, a decrease from $2,112 million in Q2 of 2007.
- Q2 EPS decreased to $1.26 from $1.48 in the year ago period.
- The company repurchased 21.3 million shares for $1,250 million as at June 30, 2008.
Second-Quarter Financial Highlights:
The company posted record premiums, fees and other revenues during the quarter.
- The Institutional Business premiums, fees and other revenues firmed 16% versus the second quarter of 2007.
- The International operating earnings grew 26% and premiums, fees and other revenues increased 15% on a comparable currency basis compared with the second quarter of 2007.
- The management reported that operating earnings for the quarter were $942 million or $1.30 per share versus $1,311 million or $1.72 per share in the prior period.
- The company announced the intention to split-off Reinsurance Group of America, Incorporated.
The Institutional Business generated quarterly earnings of $448 million.
- This compares with $521 million in the second quarter of 2007.
- The total premiums, fees and other revenues grew 16% versus Q2 of 2007.
- This was helped by the strong top-line growth in all of the businesses.
- The earnings results were impacted by lower investment income, less favorable group life underwriting results and a liability adjustment on a large institutional annuity contract.
- The group life operating earnings for the quarter were $136 million compared with $142 million in the second quarter of 2007.
- The strong interest margins in Q2 were offset by higher incurred claims.
- The management reported that premiums, fees and other revenues rose 8% versus Q2 of 2007.
- The non-medical health and other operating earnings were $93 million in the quarter.
- This is an increase of 165 from the $80 million earned in the same quarter last year.
- The premiums, fees and other revenues increased 14% due to solid growth in several product lines, especially in dental, which continued to benefit from a recent dental HMO acquisition.
- The retirement and savings operating earnings was $219 million during the quarter.
- This is compared with $299 million in the second quarter of 2007.
- The retirement and savings premiums, fees and other revenues rose 65% due mostly to higher pension closeout sales during the quarter.
The Individual Business earnings were $323 million during the quarter.
- This compares with $449 million in the second quarter of 2007.
- The total life operating earnings were $161 million, relatively flat versus the $163 million earned in Q2 of 2007.
- The higher Q2 investment income in the traditional life business was more than offset by lower underwriting margins and lower interest spreads in the variable/universal life business.
- The total life first year premiums and deposits increased slightly over the second quarter of 2007.
- The annuity operating earnings were $146 million compared with $270 million in the year ago quarter.
- A deferred acquisition cost adjustment related to the unfavorable equity market, as well as lower investment income, contributed to the earnings decline.
- Compared with the year ago quarter, the fees for separate account investment-type products within the annuity business increased slightly.
- The variable annuity premiums and deposits were $3.5 billion, an increase from the $3.2 billion received in the first half of 2008, but down versus the record $4.2 billion received in the second quarter of 2007.
The Auto & Home earnings second quarter earnings were $52 million.
