MetLife Posts Third-Quarter Loss

NEW YORK (Reuters) - MetLife Inc , the No. 1 U.S. life insurer, posted its third straight quarterly loss on Thursday, hurt by investment losses, some of which were tied to improvement in the company's own credit spreads.

But its operating profit in the latest quarter rose 18 percent, meeting Wall Street expectations.

MetLife's shares, which had shot up earlier in the day as a spate of better-than-expected insurance earnings stoked investor optimism, fell modestly in after-hours trading.

"It was likely a case of buy on the rumor, sell on the news," said Alan Rambaldini, an analyst with Morningstar in Chicago.

New York-based MetLife's net loss was $650 million, or 79 cents a share, compared with a profit of $600 million, or 83 cents per share, in the year-ago quarter.

Its operating profit increased to $718 million, or 87 cents a share, on par with analysts' average expectations, according to Thomson Reuters I/B/E/S.

MetLife's report followed a slew of other insurers posting stronger-than-expected third-quarter results, as a rally in equity markets saved them from the investment losses that plagued the sector in late in 2008 and early into this year.

On Wednesday, Lincoln National Corp, Assurant and Aflac all reported earnings that pleased markets, as did Genworth Financial on Thursday, sending its shares 10 percent higher after hours.

MetLife's loss included $1.4 billion of net realized investment losses, of which $582 million were derivatives losses tied to improvement in the company's own credit spreads.

Under accounting rules, when its own credit spreads improve, MetLife has to record a decline in the value of insurance liabilities. This also led to a loss in the second quarter.

In the year-ago quarter, the company's results had included a $483 million investment gain, driven by the increase in the value of the U.S. dollar and wider credit spreads.