MetLife Inc forecast fourth-quarter and 2010 earnings that could beat average Wall Street expectations, helped by cost cuts, improved investment returns and higher revenue, but said it did not see a return to historical growth levels until 2011 or 2012.

The largest publicly traded U.S. life insurer said it expects full-year 2010 operating earnings to rise about 50 percent, to between $3.3 billion and $3.6 billion, or $4.00 to $4.40 a share.

The average Wall Street forecast is $4.11 a share, according to Thomson Reuters I/B/E/S.

MetLife shares rose 2.7 percent, or 98 cents, to $36.31 in afternoon trading on the New York Stock Exchange.

MetLife Chief Executive Robert Henrikson said at an annual investor conference that the company sees revenue growing by up to 8 percent in 2010 as the company lures customers away from weaker rivals.

It is about a flight to MetLife, said Henrikson. It is a good story.

Life insurers were particularly susceptible to the upheaval in credit markets, which led to large losses on the sector's holding of trillions of dollars in investments. But as markets have recovered, MetLife and its next biggest rival, Prudential Financial Inc

, have emerged stronger than some peers, helping each to win more business.

MetLife expects improved investment profit and lower expenses will also help its bottom line in 2010. The company said it met its target of $400 million in cost savings a year ahead of schedule and raised its forecast for savings in 2010 to $600 million.

Henrikson said the company was wide open to really accretive acquisitions, or deals that could significantly bolster growth. He declined to speak about specific deals.

In July, a source told Reuters MetLife was interested in buying Alico, a large life insurance unit owned by bailed out insurer American International Group Inc . Henrikson said MetLife would be able to afford the $14 billion price tag suggested by Citigroup analyst Colin Devine for Alico and added the company would be willing to pay a lot for a transformational deal, the clearest acknowledgment from MetLife yet that it may be a potential buyer.

Alico, which was founded in 1921, sells life insurance and retirement products to 19 million customers in 54 countries. About half its revenue is generated in Japan.

BRIGHTER FUTURE SEEN

MetLife said while it expects meaningful earnings recovery in 2010, it does not expect to return immediately to the profit levels it recorded before the worst of the credit crisis. The company posted an operating profit of $4.8 billion in 2007.

We are a long way from where the company can perform, said Chief Financial Officer Wheeler.

He said the company's earnings performance would not be back to normal until 2011 or 2012.

For the fourth quarter, the New York-based insurer forecast operating earnings of 90 cents to 95 cents a share. Analysts' average forecast is 91 cents.

Operating earnings exclude some investment losses and are the most common measure used by Wall Street analysts.

MetLife's shares have more than tripled since hitting a 52-week low of $11.37 in March as investor fears about the capital position of U.S. life insurers eased.

(Reporting by Lilla Zuill and Elinor Comlay; editing by Derek Caney, John Wallace and Andre Grenon )

Citigroup