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Unfavorable cat experience hit MetLife’s Q1 operating earnings

MetLife Inc.on May 4 reported first-quarter operating earnings of $1.33 billion, or $1.20 pershare, compared with $1.64 billion, or $1.44 per share, in the prior-year period.

First-quarter 2016 operating earnings included variable investmentincome that came in below the company's quarterly plan range by $86 million, or8 cents per share, after tax and the impact of deferred acquisition costs. It alsoincluded unfavorable catastrophe experience, which decreased operating earningsby $45 million, or 4 cents per share, after tax, and a one-time tax benefit in Japan,partially offset by a tax charge in Chile, resulting in an overall increase in operatingearnings of $10 million, 1 cent per share, after tax.

The S&P Capital IQ consensus normalized EPS estimate forthe quarter was $1.38.

Net income for the quarter was $2.20 billion, or $1.98 per share,compared with $2.13 billion, or $1.97 per share, in the corresponding quarter ayear earlier. The first-quarter 2016 net income included $868 million, after tax,in net derivative gains, reflecting changes in interest rates, equity markets andforeign currencies.

The difference between operating earnings and net income in thequarter reflects a favorable impact of $824 million, after tax, related to asymmetricaland noneconomic accounting.

Premiums, fees and other revenues totaled $11.91 billion, downfrom $12.05 billion in the year-ago quarter. Total operating revenues were $16.61billion, compared with $17.03 billion in the first quarter of 2015.

MetLife's net investment income fell to $4.71 billion from $4.98billion in the same quarter in 2015. Variable investment income was $165 million,or $109 million after tax and deferred acquisition costs, compared with $371 million,or $241 million after tax and deferred acquisition costs, in the first quarter of2015, mostly due to weak hedge fund performance.

Operating earnings available to common shareholders from thecompany's Americas segment were $1.14 billion, down from $1.38 billion in the samequarter a year earlier. Latin America segment operating earnings available to commonshareholders rose to $137 million from $131 million in the 2015 first quarter, whileAsia segment operating earnings available to common shareholders fell to $305 millionfrom $327 million in the prior-year period.

Operating earnings available to common shareholders in Europe,the Middle East and Africa totaled $63 million, down from $70 million year overyear. MetLife's corporate and other segment lost $177 million on an operating basis,compared with a loss of $140 million in the first quarter of 2015.

Book value per share was $67.10 at the end of the first quarter,up from $64.37 on March 31, 2015. Excluding accumulated other comprehensive incomeother than foreign currency translation adjustments, book value per share rose to$53.31 from $50.45 at the end of the first quarter of 2015.