MetLife Inc (NYSE:MET) reported its fourth quarter and full-year 2025 financial results, delivering a performance characterized by strong underlying profitability that was overshadowed by significant accounting charges. The insurance giant posted adjusted earnings that exceeded analyst expectations, while its reported revenue fell short of Wall Street forecasts. The market's initial reaction, as reflected in after-hours trading, appeared muted, suggesting investors are weighing the mixed headline numbers against the company's operational progress.
Earnings and Revenue Versus Estimates
The quarterly results presented a clear divergence between profitability and top-line growth. MetLife's non-GAAP adjusted earnings per share (EPS) of $2.58 for Q4 2025 came in 9.1% above the consensus analyst estimate of $2.37. This beat was primarily driven by robust growth in net investment income and disciplined expense management.
Conversely, the company's reported total revenue of $23.81 billion missed analyst expectations of approximately $28.0 billion by a significant margin. It is crucial to understand this discrepancy in context. The large revenue "miss" is largely attributable to substantial net derivative losses of $646 million, driven by movements in interest rates, equity markets, and currency exchange rates. These accounting-driven losses, common in the insurance industry, distort the underlying business revenue trends.
A more accurate picture of operational performance comes from the company's adjusted premiums, fees, and other revenues (PFOs), which increased 29% year-over-year to $18.7 billion. Excluding large pension risk transfer (PRT) transactions, adjusted PFOs grew a healthy 8%.
Key Q4 2025 Metrics vs. Estimates:
- Non-GAAP EPS: Reported $2.58 vs. Estimate of $2.37 (Beat)
- Total Revenue: Reported $23.81B vs. Estimate of ~$28.0B (Miss)
- Adjusted PFOs (ex. PRT): $12.8B, up 8% year-over-year.
Market Reaction and Price Action
Following the earnings release, MetLife's stock showed little movement in after-hours trading. This neutral immediate reaction suggests the market had anticipated a complex report. Investors likely recognized that the headline revenue shortfall was due to non-operational, market-sensitive derivative losses, while appreciating the stronger-than-expected bottom-line profit driven by core insurance operations and investment performance.
The stock's performance over recent weeks has been mixed, with a slight gain over the past two weeks but a decline over the past month, indicating general investor caution ahead of the earnings report. The lack of a sharp negative reaction post-earnings implies the market is focusing on the company's operational beats and forward-looking guidance rather than the GAAP revenue figure.
Summary of Key Press Release Elements
MetLife's results highlighted strength across several business segments and strategic successes:
- Strong Investment Income: Net investment income rose 10% to $5.9 billion, fueled by a 70% increase in variable investment income, notably from higher private equity returns.
- Segment Performance: Adjusted earnings grew in most segments, with standout performances in Group Benefits (+12%), Retirement and Income Solutions (+18%), and EMEA (+64%). MetLife Investment Management earnings surged 275% following the acquisition of PineBridge Investments.
- Expense Discipline: The company beat its expense ratio targets, with the direct expense ratio (excluding notable items) improving to 11.6% from 13.1% a year ago.
- Capital and Shareholder Returns: MetLife returned nearly $4.4 billion to shareholders in 2025 through dividends and share repurchases and ended the year with holding company cash and liquid assets of $3.6 billion.
- Strategic Execution: CEO Michel Khalaf stated the results underscore the strength of the company's "all-weather New Frontier strategy," citing record sales in pension risk transfers and progress on strategic partnerships.
Looking Ahead
While the press release did not provide specific quantitative financial guidance for 2026, management expressed confidence that the foundation built in 2025 positions the company "to accelerate growth responsibly and deploy capital prudently."
Analysts currently have estimates in place for the coming year. The consensus sales estimate for full-year 2026 stands at approximately $78.6 billion. For the upcoming first quarter of 2026, analysts are projecting revenue of about $19.4 billion and an EPS of $2.23. MetLife's ability to continue its expense management and generate strong investment returns will be key to meeting or exceeding these expectations.
For a detailed look at MetLife's historical earnings, future estimates, and analyst projections, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor does it recommend any investment action. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
