(Reuters) - MetLife Inc <MET.N>, the largest U.S. life insurer, reported a quarterly profit that widely missed analysts' estimates, largely due to weaker underwriting and tax-related adjustment in two of its largest markets.
The company's shares were down 3.9 percent at $42 in after-hours trading on Wednesday.
While weaker underwriting weighed on operating earnings from the Americas, the company's decision to reduce sale of yen-denominated products and tax-related adjustments hit earnings from Japan.
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MetLife's Americas business, which consists of its retail and Latin America units, is the company's biggest, followed by its Asia business that includes Japan.
The company, which plans to separate a substantial portion of its U.S. Retail business, said a review of its variable annuity business during the latest quarter led to a non-cash charge of about $2 billion.
MetLife's Chief Executive Steve Kandarian said in January the company is considering splitting off its U.S. retail business, blaming the regulatory environment.
The company in March won a major regulatory and legal battle when a federal judge struck down the U.S. government's label deeming the company "too big to fail", which the U.S. government subsequently appealed against.
The company lost $2.1 billion from its derivatives program in the latest quarter, compared with $912 million a year earlier.
The insurer uses derivatives to lower risks stemming from interest rates, currency exchange rates and equities.
The company's net income fell 94 percent to $64 million, or 6 cents per share, in the second quarter ended June 30.
Total operating earnings for the Americas fell 42 percent to $835 million, whereas operating earnings for Asia fell 39 percent to $259 million.
On an operating basis, MetLife earned 83 cents per share, falling far short of analysts' average estimate of $1.35, according to Thomson Reuters I/B/E/S.
The company's total operating revenue fell 2.3 percent to $16.96 billion.
(Reporting by Sudarshan Varadhan and Nikhil Subba in Bengaluru; Editing by Sriraj Kalluvila)