MetLife to outline growth plan, eyes emerging markets

NEW YORK, Wed May 23, 2012 – MetLife Inc., the largest U.S. life insurer, said it plans to refocus its U.S. business and will seek to grow in emerging markets as part of a strategic plan that is set to be unveiled later on Wednesday.

By 2016, MetLife said it expects to increase its return on equity to between 12 percent and 14 percent, and will aim for emerging markets to account for 20 percent or more of total operating earnings.

“We have identified significant opportunities for us to continue our growth in a way that is disciplined, meets consumer needs and will position us to achieve return on equity expansion,” Chief Executive Steven Kandarian said in a statement.

MetLife is one of a number of companies that have submitted first round bids for the Asia life insurance business of ING, sources have told Reuters. The company boosted its presence in international markets in late 2010 when it bought Alico from AIG.

In the United States, the insurer said it would shift its business mix toward protection products, such as accident and health products, and away from more capital intensive products in an effort to generate more predictable cash flows.

MetLife, which will hold an investor conference on Wednesday, also said it expected to achieve $600 million in net pre-tax expense savings by 2016.

The company last month posted a $174 million loss for the first quarter on derivative losses tied to a rise in interest rates, but operating results beat expectations. Its strongest growth came in Asia and Latin America.

Berkshire, MetLife among 2012 top 10 picks, report says

NEW YORK ― Investors could reap gains of 15 percent to 20 percent next year by buying top-quality stocks such as MetLife, Comcast Corp. and Berkshire Hathaway, Barron’s said in its Dec 12 edition.

Companies with rising dividends like Procter & Gamble are also good bets for next year, the financial newspaper said in a report on its ten favorite stocks for 2012.

Four European companies made the top ten list, reflecting high dividend yields and markets depressed by the European debt crisis, Barron’s said. The paper said it likes the U.S.-listed shares of Vodafone Group, Royal Dutch Shell Daimler and Sanofi.

U.S. companies on the top ten list also included miner Freeport-McMoRan, which is profiting from developing countries’ demand for copper, and disk drive maker Seagate Technology, which should benefit from consolidation in the industry, Barron’s said.

The paper said Warren Buffett’s Berkshire is in its best shape ever, with a business mix that is churning out about $7,500 per share of profits each year. Buffett’s age (81) is the biggest downside, but he expects to run the company at least another five years, Barron’s said.

The paper acknowledged its 2011 top 10 lineup lagged the market, declining 6.9 percent on average compared with a 1.9 percent decline for the S&P 500. It attributed the subpar performance to declines in General Motors, JPMorgan Chase and United Continental.

The 2012 picks all have the potential for 15 percent to 20 percent total returns, it said.

MetLife expects 2012 growth, going back to Fed soon

NEW YORK ― MetLife expects operating earnings to rise as much as 7 percent in 2012, the largest life insurer in the United States said on Monday, though its forecasts for the fourth quarter and full-year 2011 were below expectations.

The company, whose shares rose 2.9 percent in light premarket trading, also expects to go back to regulators next month with a revised plan to return capital to shareholders, after its last one was blocked.

MetLife expects 2011 operating earnings of $5.2 billion to $5.3 billion, or $4.83 to $4.93 per share; and 2012 operating earnings of $5.1 billion to $5.6 billion, or $4.80 to $5.20 per share.

Analysts polled by Thomson Reuters I/B/E/S on average expected operating earnings of $4.95 per share in 2011 and $5.10 per share in 2012.

“Our outlook for 2012 assumes continued softness in the global economic environment,” MetLife CEO Steve Kandarian said on a conference call with investors and analysts.

Kandarian reiterated MetLife’s belief that it can increase earnings on a yearly basis even in a persistently low interest rate environment, and said he was “frustrated” with the performance of the company’s stock.

MetLife shares are down 28.5 percent this year, against a 14 percent decline for closest competitor Prudential Financial and a 9.9 percent decline for the S&P insurance index.

Because MetLife is a bank holding company, the Federal Reserve has the power to block the company’s capital plans, which it did in late October.

Kandarian said MetLife will go back to the Fed with a new plan in January and hoped to have a response by the end of the first quarter. The company is also continuing plans to sell its banking business and shed its holding company status.

For the current quarter, the company predicted earnings of $1.16 to $1.26 per share, below the analysts’ consensus of $1.28 per share.