MetLife's Q1 Profit Soars on Investment Gains, Launches $3 Billion Buyback – A Look at the Numbers

MetLife (NYSE: MET) reported a robust first-quarter 2025 performance, driven by strong investment gains and premium growth, while announcing a new $3 billion share repurchase program. The insurer’s adjusted earnings beat expectations, but the story behind the numbers reveals both opportunities and challenges in its global operations.

The Financial Breakdown

MetLife’s Q1 2025 revenue surged 10.6% year-over-year to $18.83 billion, easily surpassing Wall Street’s $18.21 billion estimate. While EPS of $1.96 fell slightly short of the $1.99 consensus, the underlying drivers of growth—investment performance and premium expansion—are worth unpacking.

Investment Gains: The Hidden Engine

The quarter’s standout was the 26% jump in variable investment income to $327 million, fueled by returns from real estate and other alternative assets. This offset a 10% decline in reported net investment income ($4.885 billion) due to fair-value adjustments on certain securities.

Meanwhile, net derivative gains of $432 million—a stark reversal from a $979 million loss in 2024—stemmed from currency fluctuations, particularly the weakening U.S. dollar against the yen and Chilean peso. Derivative positions also benefited from equity market declines.

Premium Growth: A Global Story

Premiums rose 16.6% to $11.72 billion, exceeding expectations. Strength was uneven regionally:
- EMEA: 7.7% growth to $726 million, beating estimates.
- Asia: 1.2% growth to $2.89 billion, falling short of forecasts.
- Latin America: 2% growth to $1.92 billion, also lagging.

The insurer’s Xcelerator digital platform, launched in 2023, added $200 million in premiums, fees, and other revenues since its rollout, highlighting tech-driven innovation.

The Buyback and Dividend: Rewarding Shareholders

MetLife announced a $3 billion share repurchase authorization, supplementing the remaining $360 million from its prior program. Combined, this gives the company $3.36 billion in buyback capacity, a clear signal of confidence in its capital position.

The 4.1% dividend hike to $0.5675 per share (annualizing to a 2.97% yield) underscores its financial resilience. With a market cap of $51.28 billion and a P/E ratio of 12.44, MetLife appears undervalued relative to its fair value, according to third-party analysis.

Risks and Challenges

• Currency Headwinds: Foreign exchange fluctuations reduced Asia and Latin America results.
• Fair-Value Volatility: Traditional net investment income remains sensitive to market valuations.
• Regulatory and Economic Uncertainty: MetLife noted risks tied to macroeconomic shifts and regulatory changes.

Strategic Moves to Watch

• Reinsurance Deal: A $10 billion agreement with Talcott Financial Group reduces tail risk in U.S. variable annuities by 40%.
• Capital Management: The $1 billion subordinated debenture issuance and $1.25 billion private placement enhance liquidity.

Conclusion: A Resilient Play, But Not Without Caution

MetLife’s Q1 results highlight the power of its investment strategy—variable income and derivatives delivered outsized gains, while premiums grew despite regional softness. The $3 billion buyback and dividend increase signal management’s belief in the company’s long-term strength.

Key metrics back this up:
- ROE rose to 14.9%, up from 12.6% in 2024, reflecting improved capital efficiency.
- Adjusted book value per share increased 4% to $55.01, a sign of underlying value growth.

However, investors should note the reliance on volatile investment gains and currency-exposed regions. MetLife’s dividend history (26 consecutive years paid, 12 with hikes) and undervalued P/E ratio make it a compelling option for income-focused investors, but the stock’s performance will hinge on stable markets and execution in Asia and Latin America.

In short, MetLife’s Q1 sets a strong foundation, but navigating the risks will be critical to sustaining shareholder returns.