Insurance Winners and Losers: MetLife

The market is declaring some insurance stocks healthy -- and others quite sickly -- after earnings reports on Tuesday provided a hint at the coming quarter for the insurance sector.
By Andrea Tse ,

NEW YORK (

TheStreet

) -- The market is declaring some insurance stocks healthy -- and others quite sickly -- after earnings reports on Tuesday provided a hint at the coming quarter for the insurance sector.

MetLife

(MET) - Get Report

stock fell 3.4% to $35.10 after the company on Feb. 2 reported a 70% reduction in fourth-quarter profit to $289 million, or 35 cents a share, reflecting investment losses. However, operating earnings were 96 cents a share from 17 cents, beating the consensus analysts' estimate of 95 cents per share. MetLife is currently is discussions with

AIG

(AIG) - Get Report

to buy American Life Insurance Company, its international subsidiary.

"Because MetLife is financially strong and has a deep management team, we are in a very good position to pursue acquisitions that are strategic and would accelerate our long-term growth," Metlife's chief executive Robert Henrikson said. The three-month average trading volume for MetLife is about 6 million.

Life and accident insurer

Unum

(UNM) - Get Report

lost 2.8% at $20.10, despite reporting income on an after-tax basis of $218.3 million or 66 cents a share in the fourth quarter, from $209.4 million or 63 cents a share in the same quarter last year, adjusting for items. The fourth-quarter consensus estimate was 64 cents a share. The company announced net income of $199.4 million, a marked improvement from $41.8 million a year ago.

Within the Unum U.S. operating segment, the group disability line of business reported operating income of $72.6 million in the fourth quarter, compared with $59.7 million during the same time last year. Shares of Unum plunged as the company maintained its previously stated outlook for full-year 2010, and anticipates operating earnings growth to be in the 4% to 6% range for the year.

"While we believe that the general business and economic environment will continue to pose challenges, the actions we have taken the past several years have positioned us well and provide us with significant operating and financial flexibility," Unum's chief executive Thomas Watjen said in a statement.

The three-month average trading volume for Unum is about 3.3 million.

Health management company

Aflac

(AFL) - Get Report

added 2.7% to $51 after reporting fourth-quarter net earnings of $251 million or 53 cents a share, compared with $197 million, or 42 cents a share, a year ago. Operating earnings rose 20.4% to $1.18 from the year-ago period, beating the consensus estimate of $1.15. Aflac said total revenues benefited from the strengthening of the yen to the dollar in the fourth quarter and rose 7.9% to $4.6 billion. A significant portion of Aflac's business is in Japan.

Aflac says it will aim to increase operating earnings 9% to 12% this year to $5.29 to $5.43 per diluted share, excluding the impact of the yen. But if the yen averages 90 to 95 to the dollar for the full year, the company would expect reported earnings to be in the range of $5.24 to $5.56 per diluted share. Analysts polled by Thomson Reuters are expecting operating earnings of $5.29.

The three-month average trading volume for AFLAC is about 3.3 million.

Global property and casualty insurer

ACE

(ACE)

rose 0.4% at $49.80 after reporting a record fourth-quarter net income of $953 million, or $2.81 a share, a remarkable improvement from $20 million, or 6 cents a share, in the previous year. Income excluding net realized gains and losses was $2.01 a share, compared with $1.86 a share for the same quarter last year. Analyst surveyed by Thomson Reuters expected earnings of $1.93.

Rating agency Standard & Poor's (S&P) has maintained its A+ -- or strong financial strength -- rating on ACE's core operating insurance companies, as well as its positive outlook on the rating -- meaning that a rating upgrade is possible within the next year.

S& P cited a number of ACE's strengths, including its global presence, diversification by product line and sector, strong operating performance and liquidity, conservative investment portfolio, and strong capital adequacy and enterprise risk management.

The three-month average trading volume for ACE is about 2.3 million.

-- Reported by Andrea Tse in New York

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