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Brighthouse (BHF) Q2 Earnings and Revenues Top, Increase Y/Y

Brighthouse Financial Inc.'s BHF second-quarter 2021 adjusted net income of $5.32 per share surpassed the Zacks Consensus Estimate by 70.5%. Moreover, the bottom line improved nearly 13-fold year over year.

The reported quarter witnessed continued sales growth in Annuities and Life.

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 10.6%. Moreover, the top line improved 39.8% year over year, driven by higher universal life and investment-type product policy fees, net investment income as well as other income.

Premiums of $162 million decreased 16.1% year over year.

Adjusted net investment income was $1.2 billion in the quarter under review, up 85.5% year over year. The improvement was driven primarily by higher alternative investment income. Investment income yield was 5.08%.

Total expenses increased 3.4% year over year to $1.7 billion due to an increase in policyholder benefits and claims and other expense. Corporate expenses, pre-tax, were $218 million.

Quarterly Segmental Update

Annuities’ adjusted operating income of $338 million skyrocketed 97.7% year over year, reflecting higher net investment income, higher fees, lower deferred acquisition costs ("DAC") amortization and lower reserves, partially offset by higher expenses.. Annuity sales increased 25% to $2.3 billion driven by record sales of Shield Level annuities and variable annuities with FlexChoice Access.

Life generated adjusted operating income of $68 million, up 41.7% year over year driven by higher net investment income, partially offset by a lower underwriting margin. Life insurance sales surged 111% to $26 million driven by sales of SmartCare.

Adjusted operating earnings of Run-off were $122 million, rebounding from the year-ago loss of $115 million, and higher net investment income, partially offset by a lower underwriting margin.

Adjusted operating loss at Corporate & Other was $93 million, flat year over year as higher total preferred stock dividends was offset by lower expenses.

Financial Update

Cash and cash equivalents were $4.9 billion, down 33.3% up year over year. Long-term debt of $3.4 billion declined 13.6% year over year.

Shareholders’ equity of $16.2 billion at the end of the quarter decreased 22.9% year over year.

Book value per share, excluding accumulated other comprehensive income (AOCI), was $120.62 as of Dec 31, 2020, down 25.9% from 2020 end.

As of Jun 30, 2021, estimated combined RBC ratio was between 480% and 500%.

Capital Deployment

Brighthouse bought back shares worth $246 million this year through Aug 4. It had $34 million remaining under its authorization as of Aug 4, 2021

The board of directors also approved a new $1 billion share buyback program.

The company received $250 million subsidiary ordinary dividend.

Zacks Rank

Brighthouse currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Insurance Releases

Second-quarter earnings of Manulife Financial MFC, Lincoln National LNC and Reinsurance Group of America, Incorporated RGA beat the respective Zacks Consensus Estimate.

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Lincoln National Corporation (LNC) : Free Stock Analysis Report

Manulife Financial Corp (MFC) : Free Stock Analysis Report

Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report

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

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