Earnings Preview: MetLife

MetLife (MET) is expected to report Q3 earnings after market close Wednesday, October 29, with a conference call scheduled for Thursday, October 30 at 8:00 am.

Guidance

Analysts are looking for EPS of 89c on revenue of $13.26B. The consensus range for EPS is 83c to 93c, while the consensus range for revenue is $11.89B to $14.78B, according to First Call. MetLife recently estimated that its Q3 EPS was $1.35 to $1.58, versus analysts' consensus estimate of $1.44. The company reported that its revenue was about $8.6B, compared with the consensus of $13.73B.

MetLife said it was hurt by lower than expected variable investment income, as well as lower than expected fee revenue from its variable annuity business. The company withdrew its previous 2008 guidance, citing "current volatility." The insurer sold 75M shares of common stock to the public on October 8. The proceeds from the offering will be used to bolster MetLife's capital position, the company has said. On a positive note, MetLife's liquidity jumped to about $21B on September 30, versus $14B on June 30.

Analyst Views

Bernstein called the insurer's results "decent," and the firm believes that MetLife will use the proceeds from its stock offering for M&A purposes rather than capital preservation. Bernstein reduced its target for the company to $50 from $75 but maintained its Outperform rating.