MetLife Operating Income up 25 pct, Raises outlook

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Net income, however, fell due to $406 million of losses related to investments and derivatives.

Operating profit, the yardstick by which analysts measure MetLife's profitability, rose to $1.03 billion or $1.33 a share, an all-time high for the company, from $822 million or $1.11 a share a year earlier. Eighteen analysts polled by Reuters had expected the company to earn $1.09 a share.

"MetLife is clearly on track," said Douglas Meyer, an analyst with Fitch Ratings.

The company raised its full year earnings guidance to a range of $4.55 to $4.75 a share from a previous range of $4.25 to $4.50 a share. Analysts polled by Reuters had expected $4.49 a share.

Repositioning its investment portfolio contributed to $406 million of losses, including derivative losses of $164 million, both after tax. MetLife said the "strategic repositioning" would take advantage of rising interest rates.

As a result net income fell to $714 million or 93 cents a share, from $987 million or $1.33 a share a year earlier.

"The biggest concern we've had with MetLife was whether it could integrate Travelers Life and Annuity," said Meyer. MetLife purchased the Citigroup Inc. unit last year for $11.8 billion.

Metlife's new Chairman and Chief Executive C. Robert Henrikson said in his release that "we continue to see the benefits of the Travelers acquisition," which adds to the company's capabilities.

Apart from investments, all units of the company performed well, with total earned premiums up 12 percent, annuity deposits increasing 51 percent, and auto and home insurance earnings up 22 percent.

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