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MetLife edges 4Q
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February 12, 2002: 8:11 a.m. ET
Insurer beats expectations, posts narrower net loss after legal, other expenses.
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NEW YORK (CNN/Money) - MetLife reported a fourth-quarter profit Tuesday topping Wall Street expectations excluding items, but the insurer posted a net loss after litigation and reorganizing expenses.
MetLife (MET: Research, Estimates) said fourth-quarter profit excluding items was $439 million, or 59 cents a share, up from $409 million, or 51 cents a share, a year earlier. Analysts on average predicted a profit of 58 cents, according to earnings tracker First Call.
Including charges, MetLife reported a net loss of $296 million, or 41 cents a share, narrower than the lose of $591 million, or 74 cents a share, it recorded a year earlier.
The net loss includes a previously announced $159 million after-tax charge to cover the costs of class action lawsuits and a related regulatory inquiry pending against the company. Other charges include $330 million in business re-alignment initiatives, $172 million in investment losses and other expenses.
"We faced a very challenging year. We made tough decisions that strengthened MetLife and better positioned us to provide long-term value for our shareholders and a greater array of products and services for our customers," CEO Robert H. Benmosche said, adding that he anticipates 15 percent growth in operating earnings per share and a 75 basis point increase in operating return on equity annually through 2004.
The results come as the company recovers from a $208 million charge in the third quarter related to claims from the Sept. 11 terrorist attacks. On Oct. 22, MetLife said it planned to cut 1,900 jobs, including 10 percent of its officers and directors, resulting in a $356 million charge in the fourth quarter.
The attacks affected the entire insurance industry initially, but analysts have predicted the sector would bounce back nicely as companies raise premiums to recover claims payouts.
On Feb. 8, health insurer Cigna Corp. (CI: down $0.30 to $91.20, Research, Estimates) reported lower fourth-quarter results after restructuring charges. On the same day, Citigroup Inc. (C: down $0.68 to $45.15, Research, Estimates) announced plans to spin off of its Travelers Property Casualty Corp. because of its slow growth.
The $330 million in charges relates to staff reductions, office consolidations and the discontinuance of certain businesses in the company's individual business, institutional business, and auto and home segments. The cuts are expected to save about $100 million during 2002.
Revenue for the quarter ended Dec. 31 was flat with a year ago at $8.4 billion.
In its earnings statement Tuesday, MetLife said total life insurance, and annuity premiums and deposits, rose 15 percent in the quarter to $4.11 billion from $3.56 billion a year earlier.
MetLife stock, however, moved higher despite a net loss. The stock moved 80 cents, or 2.7 percent higher at $30.37. 
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