MetLife shares fell sharply in late trading Monday after the insurer disclosed it would take a pre-tax hit of up to $165 million to fourth-quarter earnings due to a revision of reserve estimates.

In a statement released after the end of the regular trading session, MetLife said a review of the practices and procedures used to estimate its reserves had determined that “the prior release of group annuity reserves resulted from a material weakness in internal control over financial reporting.”

As a result, the statement said, the company expects to increase reserves in total between $525 million and $575 million pre-tax.

The release of fourth-quarter earnings had been scheduled for Wednesday but the company said the results will now be delayed until Feb. 13. On a preliminary basis, it reported net income of of $2.0 to $2.1 billion, or between $1.91 and $1.96 per share.

The change to its reserves is expected to reduce net income by between $135 million and $165 million. Adjusted for one-time items, MetLife expects earnings of $650 million to $700 million, or 61 cents a share to 66 cents a share.

Analysts polled by FactSet had predicted adjusted earnings of $1.08 a share. In after-hours trading Monday, MetLife shares dipped 6.8% to $50.70 after ending the regular session down 0.7%.

According to TheStreet, “The company’s problems stem from MetLife’s involvement in the so-called ‘pension-risk transfer’ business, where private employers hand over responsibility for paying their pension plans to insurance companies.”

“MET disclosed last month that it had problems locating and paying around 5% of 600,000 such retirees who were due monthly pension checks,” TheStreet noted. “Massachusetts and New York regulators recently began reviewing how well the company has done in tracking down such retirees.”

The insurer also announced Monday that the “U.S. Securities and Exchange Commission enforcement staff has also made an inquiry regarding this matter and MetLife is responding to its questions. To date, MetLife is not aware of any intentional wrongdoing in connection with this matter.”

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