NEW YORK (AP) — Insurer MetLife Inc. on Wednesday said its net income plummeted as it lost more than $1 billion on derivatives.
The company earned $471 million, or 43 cents per share, for the quarter that ended June 20. During the same period last year it had earned $2.26 billion, or $2.12 per share.
Revenue rose 2 percent to $17.04 billion.
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If not for the derivative losses, it would have earned $1.59 billion, or $1.44 per share.
Analysts surveyed by FactSet had been expecting a profit of $1.33 per share on that basis on revenue of $17.34 billion.
MetLife said rising interest rates, foreign currency changes, and the impact of its own credit during the quarter fed the derivative losses of $1.2 billion. MetLife and other insurers use derivatives to hedge against the risks of changes in interest rates and currency values, which can create fluctuations in earnings. A year ago MetLife had derivative gains of $1.3 billion.
Operating earnings rose 18 percent to $1.3 billion in the Americas, and rose 18 percent to $330 million in Asia. Profits fell 13 percent to $68 million in Europe, the Middle East, and Africa as it wrote down assets because of a proposed pension reform in Poland. Also, the year-ago period included a $12 million benefit in Greece.
MetLife shares had risen 19 cents to close at $48.42 before the results were released. They rose 11 cents to $48.53 in extended trading.
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