MetLife Inc. says it expects to report more than $1 billion in net income for the current quarter and has held variable annuity income guarantee exposure to manageable levels.

Executives at MetLife, New York, said today during the company’s investor day that revenue should range from $7.9 billion to $8.5 billion for the fourth quarter, up from $7.7 billion for the fourth quarter of 2007.

Net income should range from $1.2 billion to $2 billion, up from $1.1 billion for the fourth quarter of 2007, Met Life says.

But net income for the year likely will drop to $3.3 billion to $4.1 billion, from $4.3 billion for 2007, executives said.

Net income for the year will fall because of the turmoil in the credit market and stock market, executives said.

But MetLife executives flatly rejected an analyst prediction that it would lose heavily in VA guarantees, and they said the analysts had used incorrect assumptions in modeling its guarantee exposure.

One analyst estimated that all insurers have about $50 billion in exposure to guaranteed minimum income benefits, and that MetLife accounted for about $6.3 billion of that total.

“This is NOT correct!” MetLife says.

The analyst assumed a complete lack of hedging, no lapses, 100% client asset allocation to stock-based investments, clients who would annuitize as soon as possible, current annuitization interest of 5%, and a guaranteed ratio of 90%, MetLife says.

But MetLife uses a significant amount of hedging, expects annuitization to phase in, experiences “meaningful” annuity lapse rates, has annuitization interest greater than 6%, and finds that about one-third of clients’ GMIB assets are in fixed-income investments, MetLife says.

In addition, the company says, the guaranteed ratio is just 68%, and a number of other components of the analyst’s model are off, MetLife says.

A revised model shows that MetLife’s VA GMIB exposure is zero, MetLife says.

“In reality, some GMIB annuities are ‘in the money,’ however, the amount is manageable, [and] we hedge our exposure,” MetLife says.

To hedge VA riders, MetLife uses external reinsurance as well as financial hedging arrangements, MetLife says.

MetLife executives also reported during the investor day conference that exposure to securities lending has dropped to $27 billion, from $41 billion at the end of the third quarter, and that it has no debt coming due in the near term.