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Massive derivative loss drags on MetLife's Q4'16 net income

MetLife Inc. reported fourth-quarter 2016 operating earnings of $1.42 billion, or $1.28 per share, compared with $1.38 billion, or $1.23 per share, in the year-ago quarter.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was $1.34.

Net loss for the quarter was $2.13 billion, or $1.94 per share, compared with net income of $785 million, or 70 cents per share, a year ago.

MetLife booked net derivatives losses of $4.95 billion, or $3.2 billion after tax, included in the quarter's net income, reflecting changes in interest rates, foreign currencies and equity markets. In the year-ago quarter, MetLife recorded a derivative loss of $356 million, or $231 million after tax.

“While rising interest rates are good for MetLife’s businesses, they reduced the carrying value of our derivatives book and produced a quarterly net loss on a GAAP basis,” Chairman, President and CEO Steven Kandarian said in a statement.

Brighthouse Financial reported operating earnings available to common shareholders of $330 million, down from $388 million in the fourth quarter of 2015. The decrease was primarily due to life reserve changes and lower separate account fees.

Operating premiums, fees and other revenues totaled $12.25 billion, compared with $12.34 billion in the fourth quarter of 2015. Total operating revenues were $17.20 billion, compared with $17.11 billion a year ago. Net investment income totaled $5.04 billion in the quarter, up from $4.91 billion in the same quarter of 2015.

Total operating earnings available to common shareholders in the U.S. were $516 million, compared with $432 million in the prior-year quarter. In Asia, operating earnings grew to $354 million from $290 million. Third-quarter operating earnings for Latin America fell to $122 million from $157 million in the year-ago period.

Book value per share was $59.56 as of Dec. 31, 2016, compared with $60.00 as of Dec. 31, 2015. Book value per share, excluding accumulated other comprehensive income other than foreign currency translation adjustments, was $49.83 as of Dec. 31, 2016, compared with $51.15 as of Dec. 31, 2015.

Full-year 2016 operating earnings were $5.09 billion, or $4.59 per share, compared with $5.48 billion, or $4.86 per share, in 2015.

The S&P Capital IQ consensus normalized EPS estimate for 2016 was $4.65.

Full-year net income was $697 million, or 63 cents per share, down from $5.15 billion, or $4.57 per share, in 2015.