Sept. 11 Claims Hurt MetLife’s Earnings
MetLife Inc., the No. 1 U.S. life insurer, said Tuesday its third-quarter earnings fell because of $208 million of claims from the Sept. 11 attacks that destroyed the World Trade Center.
The New York-based company’s third-quarter net income fell to $162 million, or 21 cents a share, from $241 million, or 31 cents, a year ago. Revenue rose 1.5% to $8.07 billion from $7.95 billion.
MetLife’s results also reflect a $12-million expense related to a cost-cutting plan. The company is firing 1,900 and exiting record-keeping businesses to reduce expenses as falling stocks damp demand for variable annuities.
Operating earnings, which exclude realized gains or losses, fell 41% to $227 million, or 30 cents a share, from $384 million, or 49cents, a year ago. The results were in line with estimates, according to Thomson Financial/First Call.
Chairman and Chief Executive Robert Benmosche said he expects MetLife’s earnings will meet estimates of 58 cents to 60 cents a share in the fourth quarter.
“It’s pretty hard to have any earnings growth when revenue growth is anemic,” said Craig Smith, an analyst at Liberty Funds Group, which owns MetLife shares.
Though MetLife should benefit from increased demand for life insurance in the wake of the trade center attack, the company needs to increase insurance sales to individuals, Smith said.
Benmosche said MetLife next year plans to trim about $200million of costs out of its business serving individuals by cutting its 11,000-worker staff by 20%.
Profit at the company’s unit that sells to individuals fell 15%, and institutional or group business earnings slumped 83%.
MetLife shares gained 10 cents to $28 on the New York Stock Exchange.
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Other earnings, excluding one-time gains or charges unless noted, include:
* Oil giant BP reported a 20% drop in third-quarter profit to $3.05billion, or 14 cents a share, citing lower oil and gas prices, and said demand may not grow next year as the world economy falters.
* Lands’ End Inc. said fiscal third-quarter profit more than doubled to $12.1 million, or 41cents a share, from $4.4 million, or 15 cents, a year earlier. Revenue rose 3.8% to $376.1 million. Analysts expected earnings of 18 cents.
* Oxford Health Plans Inc. said profit fell 3% in the third quarter to $85.7 million, or 85 cents a share, as medical costs rose and the company added customers. The results beat analyst expectations. Revenue rose 7% to $1.11 billion.
* Polo Ralph Lauren Corp., maker of Polo Sport, reported fiscal second-quarter profit of $51.3million, or 52 cents a share, a penny higher than forecast, but said earnings this quarter will fall short of expectations. Revenue rose 1.6% to $595.7 million.
