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MetLife Inc (MET) Might Struggle To Post Growth In Fourth Quarter


There is every possibility that MetLife Inc (NYSE:MET) might struggle to record growth in earnings, as well as revenue, in the fourth quarter. The company invests in bonds mainly and it was a known fact that the Fed was keeping the interest rates lower to stimulate the economy following the financial turmoil witnessed in 2008. The company will be disclosing its financial results on Wednesday after the bell.

Job Market May Help

As a result of weak interest rates for a longer period, the yield on the bonds in which MetLife Inc (NYSE:MET) has invested were also at historically lower levels. However, the yield witnessed a boost after speculation of the Fed moving towards closing down the quantitative easing program. The company appeared to have gained from recovering job market conditions, that might have helped the group insurance segment.

Street analysts’ have reduced their earnings expectations by eight cents a share from three months ago. They were predicting MetLife Inc (NYSE:MET) to earn $1.44 a share three months back. Analysts have slashed it to $1.37 a share one month ago. The share drop further forced analysts’ to slash their respective estimations to $1.36 a share from $1.37 a share estimate three months ago. This could mean that the company will struggle to report an earnings upside driven by an uptick in its top line.

For the full year, the company’s Commercial Real Estate lending topped $12 billion in 2014. Similarly, it said that as much as $3.6 billion of the amount was originated from the Agriculture sector.

Earnings Expectations

On average, Street analysts’ predict the company to report $1.36 a share and revenue of $18.12 billion for the December quarter. This means that analysts’ are expecting a 1% fall in earnings and a 1.4% drop in the top line.

MetLife Inc (NYSE:MET) earned $1.37 a share and $18.38 billion in revenue in the preceding year fourth quarter. In the last four quarters, the company’s earnings failed to meet the Street predictions twice. In the September quarter, its earnings provided 15.9% positive surplus.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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