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MetLife Q2 Earnings Lag Estimates on Soft MetLife Holdings Unit
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Key Takeaways
{\"0\":\"MET posted Q2 adjusted EPS of $2.02, down 11% Y/Y and missing estimates by 7.8%.\",\"1\":\"Weakness in Asia, Group Benefits, RIS and MetLife Holdings weighed on MET\'s quarterly results.\",\"2\":\"EMEA and Latin America segments saw strong sales and earnings growth, offsetting some declines.\"}
MetLife, Inc. (MET - Free Report) reported second-quarter 2025 adjusted operating earnings per share (EPS) of $2.02, which missed the Zacks Consensus Estimate by 7.8%. The bottom line declined 11% year over year.
Adjusted operating revenues declined 4.1% year over year to $17.9 billion. The top line missed the consensus mark by 2.6%.
The weaker-than-expected quarterly results can be attributed to weaker Asia performance, lower underwriting results and less favorable investments, and declining earnings in group benefits, RIS and MetLife Holdings. Nevertheless, the downside was partly offset by improved volume and favorable Chilean encaje returns in Latin America, strong EMEA sales and a decline in expenses.
Adjusted PFOs, excluding pension risk transfer (PRT), were $12.4 billion. The metric grew 5% year over year.
Adjusted net investment income inched up 1% year over year to $5.2 billion in the quarter under review on the back of growth in assets.
Total expenses of $16.4 billion declined 1.6% year over year, driven by decreased policyholder benefits and claims. The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, improved 80 basis points year over year to 19.8%.
Net income of $698 million fell 23% year over year in the second quarter. Adjusted return on equity, excluding total notable items, deteriorated 270 bps year over year to 14.6%.
Inside MetLife’s Segments
Group Benefits: The segment’s adjusted earnings declined 25% year over year to $400 million, lower than the Zacks Consensus Estimate of $468.6 million. The metric was affected by less favorable life underwriting results and products of non-medical health. Adjusted PFOs came in at $6.4 billion, up 4% year over year.
RIS: Adjusted earnings in the segment totaled $368 million in the second quarter, which declined 10% year over year and fell short of the consensus mark of $376.2 million. A less favorable interest margin affected the metric. Adjusted PFOs, excluding PRT, advanced 24% year over year to $1 billion.
Asia: The unit recorded adjusted earnings of $350 million, which tumbled 22% year over year and lagged the Zacks Consensus Estimate of $397.6 million. The metric was hurt by softer underwriting results and less favorable investments. Adjusted PFOs rose 2% year over year to $1.7 billion in the quarter under review.
Latin America: Adjusted earnings rose 3% year over year to $233 million, higher than the consensus mark of $227 million. Favorable Chilean encaje returns and strong volume growth inflicted adversities on the metric. Adjusted PFOs rose 8% year over year to $1.6 billion, attributable to strong regional growth and persistency rates.
EMEA: The segment recorded adjusted earnings of $100 million in the second quarter, which advanced 30% year over year and came higher than the Zacks Consensus Estimate of $76.1 million. Strong volumes aided the metric. Adjusted PFOs rose 16% year over year to $719 million on the back of solid regional sales.
MetLife Holdings: Adjusted earnings decreased 5.9% year over year to $144 million but beat the consensus mark of $142.1 million. The decrease reflected the impact of the run-off of the business and lower variable investment income. Adjusted PFOs were $740 million, down 10% year over year.
Corporate & Other: The unit incurred an adjusted loss of $233 million, wider than the prior-year quarter’s loss of $220 million.
Financial Update (As of June 31, 2025)
MetLife exited the second quarter with cash and cash equivalents of $22.2 billion, which increased from the level of $20.1 billion at 2024-end. Total assets of $702.5 billion, up from the 2024-end figure of $677.5 billion.
Long-term debt totaled $15.4 billion, up from the figure of $15.1 billion as of Dec. 31, 2024. Short-term debt amounted to $379 million.
Total equity of $27.9 billion, up from the 2024-end level of $27.7 billion.
Book value per share was $35.79 as of June 30, 2025, which grew 7.5% year over year.
Capital Deployment Update
MetLife bought back shares worth around $510 million in the second quarter. It pursued additional repurchases of roughly $140 million in July 2025. Management paid a dividend of $382 million in the quarter under review.
MET’s 2025 Outlook
Earlier, management expected a variable investment income of around $1.7 billion for 2025. Corporate & Other adjusted losses were anticipated to be between $850 million and $950 million. The effective tax rate was projected to be 24-26%.
Near-Term Targets
Over the next three years, MetLife projected adjusted PFOs in the Group Benefits business to rise in the range of 4-7% annually. Adjusted PFOs in the MetLife Holdings segment were anticipated to decrease in the range of 4-6% per year, while the same in the Latin America and EMEA units were forecasted to witness high-single-digit growth and mid- to high-single-digit growth, respectively.
MetLife aimed to achieve an adjusted return on equity in the range of 15-17%. It expects free cash flow to be more than $25 billion. It expects to achieve double-digit adjusted EPS growth in the near term.
The Zacks Consensus Estimate for Virtu Financial’s current-year earnings of $4.75 per share has witnessed five upward revisions in the past 30 days against none in the opposite direction. Virtu Financial beat earnings estimates in each of the trailing four quarters, with the average surprise being 14.9%. The consensus estimate for current-year revenues is pegged at $1.9 billion, implying 18.9% year-over-year growth.
The Zacks Consensus Estimate for Evercore’s current-year earnings of $12.41 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Evercore beat earnings estimates in each of the trailing four quarters, with the average surprise being 44.1%. The consensus estimate for current-year revenues is pegged at $3.5 billion, calling for 15.9% year-over-year growth.
The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.18 per share, implying 15.2% year-over-year growth. In the past 60 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $560.8 million, calling for 10.9% year-over-year growth.
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MetLife Q2 Earnings Lag Estimates on Soft MetLife Holdings Unit
Key Takeaways
MetLife, Inc. (MET - Free Report) reported second-quarter 2025 adjusted operating earnings per share (EPS) of $2.02, which missed the Zacks Consensus Estimate by 7.8%. The bottom line declined 11% year over year.
Adjusted operating revenues declined 4.1% year over year to $17.9 billion. The top line missed the consensus mark by 2.6%.
The weaker-than-expected quarterly results can be attributed to weaker Asia performance, lower underwriting results and less favorable investments, and declining earnings in group benefits, RIS and MetLife Holdings. Nevertheless, the downside was partly offset by improved volume and favorable Chilean encaje returns in Latin America, strong EMEA sales and a decline in expenses.
MetLife, Inc. Price, Consensus and EPS Surprise
MetLife, Inc. price-consensus-eps-surprise-chart | MetLife, Inc. Quote
Behind the Headlines
Adjusted PFOs, excluding pension risk transfer (PRT), were $12.4 billion. The metric grew 5% year over year.
Adjusted net investment income inched up 1% year over year to $5.2 billion in the quarter under review on the back of growth in assets.
Total expenses of $16.4 billion declined 1.6% year over year, driven by decreased policyholder benefits and claims. The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, improved 80 basis points year over year to 19.8%.
Net income of $698 million fell 23% year over year in the second quarter. Adjusted return on equity, excluding total notable items, deteriorated 270 bps year over year to 14.6%.
Inside MetLife’s Segments
Group Benefits: The segment’s adjusted earnings declined 25% year over year to $400 million, lower than the Zacks Consensus Estimate of $468.6 million. The metric was affected by less favorable life underwriting results and products of non-medical health. Adjusted PFOs came in at $6.4 billion, up 4% year over year.
RIS: Adjusted earnings in the segment totaled $368 million in the second quarter, which declined 10% year over year and fell short of the consensus mark of $376.2 million. A less favorable interest margin affected the metric. Adjusted PFOs, excluding PRT, advanced 24% year over year to $1 billion.
Asia: The unit recorded adjusted earnings of $350 million, which tumbled 22% year over year and lagged the Zacks Consensus Estimate of $397.6 million. The metric was hurt by softer underwriting results and less favorable investments. Adjusted PFOs rose 2% year over year to $1.7 billion in the quarter under review.
Latin America: Adjusted earnings rose 3% year over year to $233 million, higher than the consensus mark of $227 million. Favorable Chilean encaje returns and strong volume growth inflicted adversities on the metric. Adjusted PFOs rose 8% year over year to $1.6 billion, attributable to strong regional growth and persistency rates.
EMEA: The segment recorded adjusted earnings of $100 million in the second quarter, which advanced 30% year over year and came higher than the Zacks Consensus Estimate of $76.1 million. Strong volumes aided the metric. Adjusted PFOs rose 16% year over year to $719 million on the back of solid regional sales.
MetLife Holdings: Adjusted earnings decreased 5.9% year over year to $144 million but beat the consensus mark of $142.1 million. The decrease reflected the impact of the run-off of the business and lower variable investment income. Adjusted PFOs were $740 million, down 10% year over year.
Corporate & Other: The unit incurred an adjusted loss of $233 million, wider than the prior-year quarter’s loss of $220 million.
Financial Update (As of June 31, 2025)
MetLife exited the second quarter with cash and cash equivalents of $22.2 billion, which increased from the level of $20.1 billion at 2024-end. Total assets of $702.5 billion, up from the 2024-end figure of $677.5 billion.
Long-term debt totaled $15.4 billion, up from the figure of $15.1 billion as of Dec. 31, 2024. Short-term debt amounted to $379 million.
Total equity of $27.9 billion, up from the 2024-end level of $27.7 billion.
Book value per share was $35.79 as of June 30, 2025, which grew 7.5% year over year.
Capital Deployment Update
MetLife bought back shares worth around $510 million in the second quarter. It pursued additional repurchases of roughly $140 million in July 2025. Management paid a dividend of $382 million in the quarter under review.
MET’s 2025 Outlook
Earlier, management expected a variable investment income of around $1.7 billion for 2025. Corporate & Other adjusted losses were anticipated to be between $850 million and $950 million. The effective tax rate was projected to be 24-26%.
Near-Term Targets
Over the next three years, MetLife projected adjusted PFOs in the Group Benefits business to rise in the range of 4-7% annually. Adjusted PFOs in the MetLife Holdings segment were anticipated to decrease in the range of 4-6% per year, while the same in the Latin America and EMEA units were forecasted to witness high-single-digit growth and mid- to high-single-digit growth, respectively.
MetLife aimed to achieve an adjusted return on equity in the range of 15-17%. It expects free cash flow to be more than $25 billion. It expects to achieve double-digit adjusted EPS growth in the near term.
MET’s Zacks Rank & Key Picks
MET currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader finance space are Virtu Financial Inc (VIRT - Free Report) , Evercore Inc (EVR - Free Report) and Acadian Asset Management Inc. (AAMI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Virtu Financial’s current-year earnings of $4.75 per share has witnessed five upward revisions in the past 30 days against none in the opposite direction. Virtu Financial beat earnings estimates in each of the trailing four quarters, with the average surprise being 14.9%. The consensus estimate for current-year revenues is pegged at $1.9 billion, implying 18.9% year-over-year growth.
The Zacks Consensus Estimate for Evercore’s current-year earnings of $12.41 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Evercore beat earnings estimates in each of the trailing four quarters, with the average surprise being 44.1%. The consensus estimate for current-year revenues is pegged at $3.5 billion, calling for 15.9% year-over-year growth.
The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.18 per share, implying 15.2% year-over-year growth. In the past 60 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $560.8 million, calling for 10.9% year-over-year growth.