(Reuters) - Insurer MetLife Inc's MET.N fourth-quarter operating profit, which excludes a $3.2 billion derivative loss, fell short of analysts' estimates due to a drop in income in its U.S. retail unit and in Latin America.

A MetLife Inc building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake

The largest U.S. life insurer counts on its derivatives program to hedge against risks such as volatile currency exchange rates, equities markets and interest rate changes.

“While rising interest rates are good for MetLife’s businesses, they reduced the carrying value of our derivatives book and produced a quarterly net loss on a GAAP basis”, Chief Executive Steven Kandarian said in a statement.

The derivate loss led to a net loss of $2.13 billion, or $1.94 per share, in the quarter ended Dec. 31, compared with a net profit in the both the year-ago and preceding quarters.

On an operating basis, MetLife earned $1.28 per share, higher than a year-ago, but lower than analysts’ average estimate of $1.34, according to Thomson Reuters I/B/E/S.

Operating earnings for Latin America fell 22 percent to $122 million due to higher expenses a one-time tax benefit in the prior-year quarter.

Operating earnings in MetLife’s Brighthouse Financial fell 15 percent, including $35 million related to separation activities.

The insurer, which has been streamlining its businesses in response to a strict regulatory environment, has announced plans to spin off the U.S. retail unit by first half of this year.

MetLife’s total operating revenue rose 0.5 percent to $17.20 billion, missing the average analyst estimate of $17.34 billion.

The company’s shares were down about 1 percent at $53.73 in trading after the bell on Wednesday.

MetLife’s shares have rallied 13.5 percent since Donald Trump’s election victory, gaining as insurers are expected to benefit from the looser regulations and tax cuts that Trump has promised, as well as a rising interest-rate environment.