Brighthouse (BHF) Q2 Earnings and Revenues Miss Estimates
Brighthouse Financial Inc.'s BHF second-quarter 2020 adjusted net income of 41 cents per share missed the Zacks Consensus Estimate by 72.7%. Moreover, the bottom line plunged 83.9% year over year.
The quarter witnessed poor annuity sales, lower premiums and adjusted net investment income, offset by higher Life insurance sales and lower expenses.
Brighthouse Financial, Inc. Price, Consensus and EPS Surprise
Brighthouse Financial, Inc. price-consensus-eps-surprise-chart | Brighthouse Financial, Inc. Quote
Behind the Headlines
Operating revenues of $1.8 billion missed the Zacks Consensus Estimate by 12%. Moreover, the top line decreased 18.2% year over year, primarily due to lower premiums, universal life and investment-type product policy fees, net investment income and other revenues.
Premiums of $193 million decreased 16.8% year over year.
Adjusted net investment income was $656 million in the quarter under review, down 30.4% year over year, due to lower alternative investment income. Investment income yield was 2.98%.
Corporate expenses of $210 million pretax decreased 1.9% sequentially.
Total expenses decreased 15.8% year over year to $1.6 billion on lower policyholder benefits and claims, interest expense on debt, other expenses, and drop in amortization of DAC and VOBA.
Quarterly Segment Update
Annuities adjusted operating income of $171 million was down 35.5% year over year, reflecting lower net investment income, lower fees, and higher deferred acquisition costs ("DAC") amortization, partially offset by lower expenses. Annuity sales decreased 3% to $1.8 billion.
Life generated adjusted operating income of $48 million, down 17.2% year over year reflecting lower net investment income, partially offset by lower DAC amortization and a higher underwriting margin. Life insurance soared 200% year over year to $12 million.
The Run-off segment incurred adjusted loss of $115 million against adjusted earnings of $2 million in the year-ago quarter. The downside was due to lower net investment income.
Adjusted operating loss at Corporate & Other was $93 million, wider than loss of $71 million incurred in the year-ago quarter. The lower loss reflects higher expenses and higher taxes.
Financial Update
As of Jun 30, 2020, cash and cash equivalents were nearly $7.3 billion, up 84% year over year.
Shareholders’ equity of about $20.9 billion at quarter-end increased 28.5% year over year.
Book value per share, excluding preferred stock and accumulated other comprehensive income, was $162.85 as of Jun 30, 2020, up 39.4% year over year.
Share Buyback Program
Brighthouse Financial bought back shares worth $180 million in the second quarter. The company has temporarily its suspended share buyback program.
Zacks Rank
Brighthouse Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported second-quarter results so far, earnings of Everest Re Group, Ltd. RE, Reinsurance Group of America, Incorporated RGA and Palomar Holdings, Inc. PLMR beat the respective Zacks Consensus Estimate.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
Palomar Holdings, Inc. (PLMR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
