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 3.7 percent in 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 is in the middle of a transformation following its acquisition of Alico in 2010. The company now derives a substantially larger share of its business outside the United States, and much of its growth will come from there as well.
The insurer recently reorganized its business units to acknowledge that shift, and it has started spending more aggressively on international branding.
MetLife said it 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 Chief Executive Steve Kandarian said on a conference call with investors and analysts. The 2012 plans also assumes no share buybacks, which would raise earnings per share.
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 <.GSPINSC>.
GOING BACK TO THE FED
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.
MetLife expects to have $6 billion to $7 billion in capital in 2012 for dividends and other actions. Analysts have said they expect MetLife to raise its dividend substantially and buy back at least $1 billion in stock.
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.
Outgoing Chief Financial Officer Bill Wheeler said the company's earnings would have been 6 cents per share higher but for integration costs and reserve charges.
(Reporting By Ben Berkowitz; Editing by Derek Caney)