MetLife Earnings: Variable Investment Income Loss Drags Down Adjusted Earnings

No-moat-rated MetLife’s first-quarter results were affected by a loss in variable interest income, which was partially offset by favorable underwriting margins, volume growth, and higher recurring investment income. The company reported adjusted earnings of $1.2 billion or $1.52 per share in the first quarter versus $1.7 billion or $2.04 per share in the first quarter of the previous year. The company announced a quarterly dividend of $0.52 per share starting from the second quarter of 2023, which represents a 3.8% dividend yield as per the current stock price. The shares of the company were down 8% after releasing its results, which we think is an overreaction by the market. We are maintaining our $63 fair value estimate for MetLife after incorporating the first-quarter results.