MetLife 4Q profit falls 12 percent

NEW YORK -- Life insurer MetLife Inc. said Tuesday that its fourth-quarter profit slipped 12 percent as it paid out more in claims and benefits, but results topped Wall Street's estimates.

For the final three months of the year, the New York-based company said net income available to common shareholders fell to $954 million, or $1.20 per share, from $1.08 billion, or $1.44 per share, a year earlier.

Total revenue rose 13 percent to $13.96 billion from $12.31 billion as premiums rose 10 percent. But the amount the company paid out in claims and benefits also rose, to $7.01 billion from $6.07 billion.

During the quarter, MetLife recorded net realized investment gains of $1.35 billion, including $403 million in credit-related losses and impairments. The losses were offset by derivative gains of about $1.6 billion, due primarily to a decrease in interest rates during the quarter. In the fourth quarter of 2007, MetLife recorded net realized investment losses of $125 million.

Excluding investment gains and losses, operating income dropped to $148 million, or 19 cents per share, from $1.16 billion, or $1.54 per share, in the year-earlier period. Still, results exceeded Wall Street's expectations for earnings of 14 cents per share, according to a poll by Thomson Reuters.

Like most insurers, MetLife emphasizes operating income because it excludes investment gains and losses and is considered more reflective of the company's performance.

Results were hurt by lower earnings in several lines of business.

In the company's institutional segment, revenue jumped 18 percent to $4.2 billion on an increase in total premiums. Operating earnings, however, declined to $272 million from $527 million due to significantly lower investment income.

Retirement and savings operating earnings tumbled 75 percent.

In the individual insurance business, the company reported an operating loss of $106 million, compared with earnings of $380 million in the prior-year period, hurt in part by lower fee revenue, the company said.

The international insurance segment's profit fell 51 percent.

The one segment that saw an improvement in earnings was MetLife's auto and home division. Operating earnings rose 9 percent to $112 million due in part to lower auto claim frequencies.

For the full year, net income available to common shareholders declined 26 percent to $3.08 billion, or $4.14 per share, from $4.18 billion, or $5.48 per share, in 2007. Operating income fell to $2.74 billion, or $3.67 per share, from $4.57 billion, or $6 per share.

In after-hours trading, shares added 68 cents, or 2.4 percent, to $29.20. The stock fell 54 cents to $28.52 in the regular session.