MetLife, the nation’s largest life insurer, reported higher earnings on gains from derivatives despite a loss from a legal settlement with insurance regulators in New York.
Net income for the first quarter of the year was up 36 percent to $1.3 billion, or $1.14 per share, compared with $956 million, or 87 cents per share, during the same three-month period in 2013.
Operating earnings were $1.56 billion, or $1.37 per share, down 4 percent from $1.63 billion, or $1.47 per share, during the same period in 2013.
Total operating revenues were up 1 percent to $17.1 billion, compared with $16.9 billion during the same quarter last year.
The company’s earnings were affected by an investment loss of $343 million, after tax, related to its sale of a pension-risk transfer business in the United Kingdom. The loss, however, was less than a previously announced estimate of $350 million to $390 million.
MetLife’s earnings were helped by a net gain from derivatives of $223 million, after tax, “reflecting a decline in interest rates, changes in foreign currencies and the impact of MetLife’s own credit during the quarter,” the company said. MetLife uses derivatives to hedge against certain risks, such as fluctuations in interest rates and foreign currencies.
The corporate division within MetLife had an operating loss of $192 million during the quarter, compared with a loss of $86 million during the same quarter in 2013. A legal settlement with regulators in New York resulted in a $57 million after-tax cost. MetLife settled after an investigation into two of its subsidiaries ALICO and DelAm, which were purchased from AIG in 2010, which allegedly solicited business in New York without a license, Reuters reported March 31.
“MetLife had a solid quarter,” MetLife Chairman and CEO Steven A. Kandarian said in a statement. “While our legal settlement with New York had an impact on earnings, strong investment income and significant cost savings helped the bottom line. MetLife’s commitment to enhancing long-term shareholder value was demonstrated by the recently announced 27 percent increase in our common stock dividend.”
MetLife is headquartered in New York and has offices in Bloomfield, where it is downsizing its workforce. The company plans to keep about 1,300 at the site.
Shares of the company were trading at $51.75 Wednesday night after the close of the New York Stock Exchange, down 60 cents.