MetLife (MET) To Report Q2 Earnings: What's In The Offing?

MetLife, Inc. (NYSE:MET) is set to release its second-quarter 2019 earnings on Jul 31, 2019.

The Zacks Consensus Estimate for its earnings per share is pegged at $1.32 (up 1.54% year over year) on revenues of $16.5 billion (down 22.3%).

Factors Affecting Q2 Results

Within the U.S. business segment, Group Benefits is expected to report strong underwriting results for both life and Non-Medical Health coverage. This business is also likely to report increase in sales of voluntary products. The company’s brand name, product sets, customer base and distribution reach should drive sales of voluntary products.

We expect low single-digit growth in property and casualty revenues and the underwriting gains should be offset to some extent from catastrophe losses incurred during the to-be-reported quarter.

Favorable underwriting and investment margins, solid volume growth, as well as lower taxes will likely aid operating earnings in Retirement and Income Solutions segment.

In the company’s International business, we expect higher contributions from Asia led by rise in Accident & Health (A&H) and foreign currency products in Japan, and greater A&H sales in India and Japan.
The unit cost initiatives undertaken by the company should lead to a decline in adjusted expense ratio.

Share repurchases made by MetLife in the to-be-reported quarter will likely add to its bottom line.

Earnings Surprise History

The company boasts an attractive earnings surprise history. It beat estimates in each of the last four quarters with an average positive surprise of 9.8%. This is depicted in the chart below:

MetLife, Inc. Price and EPS Surprise

Here is what the quantitative model predicts:

Our proven model does not conclusively show that MetLife is likely to beat on earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: MetLife has an Earning ESP of -0.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: MetLife carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Lincoln National Corp. (NYSE:LNC) has an Earnings ESP of +0.71% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Financial Group, Inc. (NYSE:AFG) has an Earnings ESP of +0.66% and a Zacks Rank #3.

Alleghany Corp. (NYSE:Y) has an Earnings ESP of +1.74% and a Zacks Rank #3.

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