MetLife Inc , the largest U.S. life insurer, reported a 90 percent fall in quarterly profit on derivative losses linked to its credit spreads but its operating profit beat estimates.
MetLife, like its peers, is heavily exposed to the persistently low interest rate environment. But the company has long had a substantial derivatives program designed to smooth out that risk.
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But higher interest rates, foreign currency changes and impact of the company's credit spreads resulted in derivative net losses of $924 million, after tax, in the quarter. The company recorded derivative net gains of $351 million in the year earlier quarter.
The company's net income fell to $96 million, or 9 cents per share, in the fourth quarter, from $959 million, or 90 cents per share, a year earlier.
Operating profit was $1.25 per share.
Analysts on average had expected earnings of $1.18 per share, according to Thomson Reuters I/B/E/S.
MetLife shares closed at $37.50 on the New York Stock Exchange on Wednesday. They have gained 16 percent in the last three months, outperforming the 13 percent rise in Dow Jones U.S. Insurance Index during the same period.
(Reporting by Aman Shah in Bangalore; Editing by Sriraj Kalluvila)