May 4 (Bloomberg) -- MetLife Inc., the largest U.S. life insurer, said first-quarter profit climbed 20 percent on higher international revenue and investment income after buying a unit from American International Group Inc.
Net income rose to $1.01 billion, or 78 cents a share, from $835 million, or 97 cents, a year earlier when there were fewer shares outstanding, the New York-based company said today in a statement. Operating profit, which excludes some investment results, was $1.33 a share, beating the $1.26 average estimate of 18 analysts surveyed by Bloomberg.
Steven Kandarian, 59, took over as chief executive officer this month after six years heading the company’s investment portfolio. MetLife selected Steven J. Goulart, 52, to replace him as chief investment officer, after Goulart helped secure the purchase of American Life Insurance Co. from New York-based AIG for about $16 billion.
“The Alico acquisition is completely altering their business mix,” John Nadel, an analyst at Sterne Agee & Leach Inc., said before the earnings were released. Nadel has a buy rating on the stock.
MetLife has climbed about 3.9 percent this year on the New York Stock Exchange, compared with the 4.3 percent climb of the Standard & Poor’s 500 Insurance Index. Results were released after the close of regular trading.
Premiums, fees and other revenue rose 27 percent to a record $11 billion, from $8.66 billion. International revenue more than tripled to $3.8 billion.
MetLife said the March 11 Japanese earthquake will reduce second-quarter after-tax operating earnings by $45 million to $65 million, on additional claims and higher expenses.
Book value per share, a measure of assets minus liabilities, rose 2.4 percent to $45.24 in the first three months of 2011. MetLife had $254 million in derivatives losses in the first quarter as interest rates rose and the U.S. dollar weakened. In the same period of 2010, the company reported $19 million of losses on the contracts.
Net investment income rose 14 percent to $4.9 billion from $4.34 billion a year earlier. MetLife said variable investment income, a category that includes buyout and hedge funds, jumped 38 percent to $434 million on gains from private-equity funds.
Premiums, fees and other revenue in the U.S. slipped to $7.0 billion from $7.4 billion on a decline of sales at the operation selling life policies to groups and individuals.
MetLife added 20 million customers in the fourth quarter with the purchase of Alico, which boosted the company’s presence in insurance markets from Chile to Japan.
MetLife sold 68.6 million shares for $2.97 billion in March to raise funds to repurchase and cancel convertible preferred shares owned by New York-based AIG. AIG sold 78.2 million shares and 40 million common equity units of MetLife for $6.7 billion, liquidating the securities it received in the Alico deal.
Robert Henrikson, 63, MetLife’s previous CEO, will remain chairman this year. He reaches mandatory retirement age in 2012.
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