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Brighthouse (BHF) Q1 Earnings and Revenues Beat, Rise Y/Y

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Brighthouse Financial Inc.'s BHF first-quarter 2021 adjusted net income of $4.86 per share surpassed the Zacks Consensus Estimate by 100.3%. Moreover, the bottom line improved 86.9% year over year.

The reported quarter witnessed continued sales growth in annuities and lower expenses.

Brighthouse Financial, Inc. Price, Consensus and EPS Surprise

Brighthouse Financial, Inc. Price, Consensus and EPS Surprise
Brighthouse Financial, Inc. Price, Consensus and EPS Surprise

Brighthouse Financial, Inc. price-consensus-eps-surprise-chart | Brighthouse Financial, Inc. Quote

Behind the Headlines

Total operating revenues of $2.4 billion beat the Zacks Consensus Estimate by 9.1%. Moreover, the top line improved 16.2% year over year, driven by higher universal life and investment-type product policy fees, net investment income as well as other income.

Premiums of $184 million decreased 7.1% year over year.

Adjusted net investment income was $1.2 billion in the quarter under review, up 29% year over year. The improvement was driven primarily by higher alternative investment income. Investment income yield was 5.12%.

Total expenses decreased 37.6% year over year to $1.7 billion due to a decrease in policyholder benefits and claims and interest expense on debt. Corporate expenses were $203 million.

Quarterly Segmental Update

Annuities reported adjusted operating income of $336 million, up 6.3% year over year, reflecting higher net investment income, higher fees and lower reserves, partially offset by higher deferred acquisition costs ("DAC") amortization and higher expenses. Annuity sales increased 8% to $2.1 billion driven by higher sales of Shield Level Annuities and variable annuities with FlexChoice Access.

Life generated adjusted operating income of $44 million, up almost four fold year over year driven by higher net investment income, partially offset by a lower underwriting margin. Life insurance sales increased 44% to $23 million.

Adjusted operating earnings of Run-off were $76 million, rebounding from the year-ago loss of $70 million, reflecting higher net investment income.

Adjusted operating loss at Corporate & Other was $69 million, which was wider than the prior-year loss of $46 million due to higher total preferred stock dividends.

Financial Update

Cash and cash equivalents were $4 billion, down 2% from 2020 end.

Shareholders’ equity of $15 billion at the end of the quarter decreased 16.7% from 2020 end.

Book value per share, excluding accumulated other comprehensive income (AOCI), was $118.24 as of Dec 31, 2020, down 4.7% from 2020 end.

As of Mar 31,2021, estimated combined RBC ratio was between 500% and 520%.

Share Buyback Program

Brighthouse bought back shares worth $68 million in the quarter under review with another $55 million through May 7.

Zacks Rank & Peer Releases

Brighthouse currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

First-quarter earnings of Lincoln Financial LNC and Primerica PRI beat the Zacks Consensus Estimate while that of American Equity Investment AEL missed the same.

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Lincoln National Corporation (LNC) : Free Stock Analysis Report

American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report

Primerica, Inc. (PRI) : Free Stock Analysis Report

Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report

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