Strong Adjusted Earnings and EPS Growth
Reported adjusted earnings of $1.6 billion and adjusted EPS of $2.42, representing an 18% increase in adjusted earnings and a 23% increase in adjusted EPS year-over-year.
Metlife
· MET
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- +6.35%
- Next Earnings Date:
- 2026-08-05
Earnings Call Sentiment
PositiveThe call presented a strong quarter with broad-based top-line growth, improved margins, disciplined expense and capital management, and clear progress integrating PineBridge into MIM. Management highlighted robust VII performance, a top-end ROE of 17%, and numerous regional wins (notably Asia and EMEA). Headwinds were present but generally described as manageable and/or seasonal: net investment/trading losses, short-term MIM outflows and integration expenses, tax-related impacts in Latin America, modest spread headwinds in RIS, and localized operational/regulatory items. Overall, the positive operational and financial momentum materially outweighs the lowlights, which are characterized as limited, manageable, or transitory.
Company Guidance
The company reiterated several quantified targets and near‑term expectations: RIS full‑year adjusted earnings are guided to $1.6–$1.8 billion; company adjusted ROE target is 15–17% (Q1 reached 17%); 2026 direct expense‑ratio target is 12.1% (Q1 was 11.9%); effective tax‑rate guidance is 24–26% (Q1 was 24%); RIS total investment spread guidance is 100–120 bps (Q1 was 119 bps) with core spread ex‑VII ~95 bps; pretax variable investment income was $518 million in Q1 and total VII assets were $18.2 billion (PE avg Q1 return ~2.9%, VC +6.8%); holding‑company liquidity target is $3–$4 billion (Q1 cash $3.9 billion); 2025 U.S. NAIC RBC was 379% vs a 360% target and estimated U.S. statutory adjusted capital was ~$16.2 billion; free cash‑flow conversion target remains 65–75%; and capital actions/constraints noted included ~$750 million of Q1 share repurchases (plus ~$200 million in April), ~$370 million of common dividends in Q1 (total returned ≈$1.1 billion), a $1 billion subordinated debt issuance, and ≈$1.1 billion remaining on the buyback authorization.
Top-End Return on Equity
Adjusted return on equity reached 17%, at the top end of the company's 15%–17% target range, outperforming cost of capital.
Revenue and Top-Line Momentum
Adjusted premiums, fees and other revenues (excluding pension risk transfers) increased 10% year-over-year; broad-based growth across businesses and regions.
Variable Investment Income (VII) Outperformance
Pretax VII was $518 million (third consecutive above-expectation quarter); private equity returns averaged ~2.9% and venture capital returned 6.8% in the quarter; total VII assets of $18.2 billion.
Expense Discipline
Direct expense ratio improved to 11.9%, ahead of the 2026 full-year target of 12.1% despite integrating PineBridge (a higher-expense asset manager).
Capital Return and Strength
Returned roughly $1.1 billion to shareholders in Q1 (approx. $750 million repurchases and ~$370 million dividends), repurchased an additional ~$200 million in April, increased common dividend by 4.4%, issued $1 billion subordinated debt (oversubscribed >5x), and held $3.9 billion cash at holding companies (top end of $3–$4B target).
Segment-Level Outperformance — Asia and EMEA
Asia adjusted earnings $487 million (+31% YoY) with sales +22% constant currency; Japan sales +26% CC and Korea +44% CC. EMEA adjusted earnings $110 million (+33% YoY) with adjusted PFOs +15% CC and sales +17% CC.
Group Benefits and RIS Growth
Group Benefits adjusted earnings $439 million (+19% YoY) with sales up 15% and persistency in the high 90s. Retirement & Income Solutions (RIS) adjusted earnings $451 million (+11% YoY) and total spread at 119 bps (top of 100–120 bps guidance).
MIM Early Integration Progress
MetLife Investment Management (post-PineBridge) adjusted earnings $47 million (+68% YoY) with a strong pipeline, particularly in private assets, and international distribution opportunities from PineBridge (approx. 50% of PineBridge AUM outside the U.S.).
High-Quality Private Asset Positioning
Private fixed income portfolio valued at ~$85 billion; ~95% investment grade and limited exposure to high-risk segments (no BDC exposure; middle market loan exposure under 1% of general account).
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the MetLife First Quarter 2026 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. Before we get started, I refer you to the cautionary note about forward-looking statements in yesterday's earnings release and to risk factors discussed in MetLife's SEC filings. With that, I will turn the call over to John Hall, Global Head of Investor Relations.
John Hall
Thank you, operator, and good morning, everyone. We appreciate you joining us for MetLife's First Quarter 2026 Earnings Call. Before we begin, I'd point you to the information on non-GAAP measures on the Investor Relations portion of metlife.com in our earnings release and in our quarterly financial supplements, which you should review. On the call this morning are Michel Khalaf, President and Chief Executive Officer; and John McCallion, Chief Financial Officer and Head of MetLife Investment Management. Also available to participate in the discussion are other members of senior management. Last night, we released an earnings call presentation, which addresses the quarter. It is available on our website. John McCallion will speak to this presentation in his prepared remarks.
An appendix to the deck features disclosures, GAAP reconciliations and other information, which you should also review. After prepared remarks, we will have a Q&A session, which will end promptly at the top of the hour. As a reminder, please limit yourself to 1 question and 1 follow-up. Now, over to Michel.
Michel Khalaf
Thank you, John, and good morning, everyone. This was an exc...
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