Real Estate, Investments Help MetLife Bottom Line

By Steve Tuckey

July 29, 2005 at 08:00 PM

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Annuity deposits slumped at MetLife Inc. during the second quarter, but one-shot real estate sales and strong investment income helped the company produce a big gain in earnings.[@@]

MetLife, New York, is reporting $2.2 billion in net income for the latest quarter on $11 billion in revenue, up from $954 million in net income on $9.5 billion in revenue for the second quarter of 2004.

Second-quarter net income was boosted by the sale of 2 MetLife buildings in New York, at 1 Madison Ave. and 200 Park Ave., for $1.2 billion.

MetLife also increased ordinary investment income to $3.5 billion, from $3.1 billion, and premium revenue increased to $6 billion, from $5.3 billion.

Total individual annuity deposits fell to $2.5 billion, from $2.9 billion, and first-year premiums for individual variable and universal life products fell to $161 million, from $226 million.

Despite those decreases, individual business operating earnings increased to $278 million, from $217 million.

A wider spread between the rates MetLife earns on its own investments and the rates it pays customers helped, MetLife says.

Wider interest spreads also contributed to increases in earnings at the retirement and savings unit, which helped MetLife's institutional business increase operating earnings to $358 million, from $317 million.

Suneet Kamath, an analyst at Sanford C. Bernstein & Company, New York, says in a comment on MetLife's earnings that unusually high net investment gains showed up in several segments and were offset by high group life claims rates.

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