MetLife Inc., the largest U.S. life insurer, fell the most in two months after fourth-quarter profit declined 87 percent on costs tied to lower interest rates and annuities.
MetLife slipped 2.8 percent to $36.46 at 10:54 a.m. in New York, the most intraday since Dec. 14. The insurer advanced less than 1 percent in the 12 months through yesterday, compared to the 13 percent gain of the Standard & Poor’s 500 Index.
Operating return on equity was 11.3 percent for the year, New York-based MetLife said yesterday in a statement, and the firm projects a return between 12 and 14 percent by 2016. MetLife’s 2013 projection doesn’t include buybacks since it can’t be sure of winning regulators’ approval, even as the firm looks to divest its bank, the company said in December. Chief Executive Officer Steve Kandarian, 60, declined to provide further guidance on share buybacks, which can help boost a company’s return on equity, in an earnings call today.
“Met may by its own choice be hamstrung in its efforts to remove excess capital from its balance sheet,” Eric Berg, an analyst at RBC Capital Markets, said today in a note to clients. Removing excess capital is “critical” to achieving target return on equity, Berg said. He rates the shares sector perform.
Net income for the quarter dropped to $127 million from $990 million a year earlier, the firm said. Operating profit, which excludes some investing results, was $1.25 per share, beating the $1.18 average estimate of 19 analysts surveyed by Bloomberg.