Analyst Note| Rajiv Bhatia, CFA |
MetLife reported a solid start to the year with adjusted EPS of $2.20 easily topping the FactSet consensus of $1.53. We attribute the bulk of the beat to higher-than-expected variable investment income from private equity funds. Pretax variable investment income was $1.39 billion, up from $778 million in the prior quarter and $351 million in the year-ago period. Excluding the divestiture of the property and casualty business, U.S. adjusted earnings increased 17% and Asia saw strong growth while Latin America and Europe, the Middle East, and Africa saw softness. We expect variable investment income to revert to more normalized levels, and we will maintain our no-moat rating and $48 fair value estimate.