Turmoil slices MetLife income

America's biggest life insurer, MetLife, today admitted third-quarter profits will plunge by up to 48% as investment income is slashed by the financial turmoil.

The company, which will report annual results on
29 October, withdrew its full-year earnings forecast and said it plans to sell 75 million shares, which it may price today.

Operating earnings for the three months to September fell to between $600 million (£343.9 million) and $675 million from $1.16 billion a year ago.

MetLife is writing down its $350 billion investment portfolio as the housing slump takes it toll on the firm's fixed-income and equity holdings.

It has also been hit by losses in hedge fund and private-equity investments and stakes in failed companies such as Lehman Brothers and Washington Mutual.

MetLife estimates it has excess capital of more than $4 billion and had cash and cash equivalents of about $21 billion at the end of September, up from $14 billion in June.