MetLife sees Alico giving earnings boost in 2011

NEW YORK
MetLife Inc. said Monday that its acquisition of international life insurance provider Alico will provide it with a sharp profit boost.
The New York-based life insurance company said it expects to post operating earnings between $5.1 billion and $5.5 billion, or $4.75 to $5.15 per share, for 2011. That represents a 38 percent jump over the company's forecast for full-year 2010 earnings.
Analysts polled by Thomson Reuters, on average, expect the insurer to earn $5.03 per share in 2011.
MetLife CEO Robert Henrikson on Monday said at the company's investor day that international business is expected to account for 41 percent of the company's operating earnings for 2011. That's more than twice what international operations contributed in the past.
The earnings stream from Alico diversifies the company's income and balances risk, Henrikson said.
"We are running a global business now at MetLife," he told investors in comments that were webcast. "We are diversified by product, by geography and by distribution."
MetLife paid $16.2 billion in cash and stock to American International Group Inc. for Alico on Nov. 1.
"Now, there is an unbelievable and continuing focus on continuing and maximizing the value of Alico," Henrikson said.
One reason Alico is expected to play such a big role, said Chief Investment Officer Steven A. Kandarian, is that growth is expected to remain slow in the U.S. Low interest rates are expected to continue through much of the year, perhaps rising at the end of 2011. While Japan, where Alico has major operations, is also expected to be weighed by economic issues, MetLife sees some growth there, along with stronger improvements in Latin America.
Overall, according to a slide presentation shown to investors, U.S. corporate benefit programs will be the largest contributor to MetLife operating earnings in 2011, with retirement and individual life following. Internationally, individual life is the largest segment, with accident and health and retirement following.
For the fourth quarter of 2010, MetLife expects operating earnings between $1.04 and $1.14 per share. Wall Street expects operating profit of $1.04 per share, with estimates ranging from 94 cents to $1.20 per share.
For the full year 2010, MetLife forecast earnings on an operating basis between $4.26 and $4.36 per share. Analysts expect $4.28 per share for the year.
MetLife shares rose 61 cents to close Monday at $40.75. The stock has changed hands between $33.40 and $47.75 in the past 52 weeks.