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Brighthouse (BHF) Q3 Earnings & Revenues Miss, Fall Y/Y

Brighthouse Financial Inc. BHF incurred third-quarter 2022 adjusted net loss of 4 cents per share against the Zacks Consensus Estimate of earnings of 78 cents and the year-ago earnings of $6.17.

The reported quarter witnessed lower premiums, higher expenses and lower adjusted net investment income.

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 $1.9 billion decreased 21.1% year over year due to lower premium, universal life and investment-type product policy fees and net investment income. The top line missed the consensus mark by 3.1%.

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

Adjusted net investment income was $900 million in the quarter under review, down 30.1% year over year, due to lower alternative investment income, partially offset by asset growth. The investment income yield was 3.2%.

Total expenses increased 16.2% year over year to $2.4 billion due to an increase in policyholder benefits and claims, interest credited to policyholder account balances and amortization of DAC and VOBA. Corporate expenses were $217 million.

Quarterly Segmental Update

Annuities reported an adjusted operating income of $125 million, down 67.5% year over year, due to lower fees, higher reserves and higher deferred acquisition costs (DAC) amortization, partially offset by lower expenses. Annuity sales increased 58% to $3.7 billion driven by higher sales of fixed deferred annuities.

Life generated an adjusted operating loss of $7 million against earnings of $38 million in the year-ago quarter on lower net investment income and a decline in underwriting margin. Life insurance sales decreased 30% to $19 million as a result of the recent macroeconomic headwinds.

Adjusted operating loss at Run-off was $21 million against the year-ago earnings of $38 million due to lower net investment income and underwriting margin.

Corporate & Other broke even against the prior-year loss of $83 million on higher net investment income.

Financial Update

Cash and cash equivalents were $4.8 billion, up 16.7% from 2021 end.

Shareholders’ equity of $10.2 billion at the end of the quarter decreased 63.7% from 2021 end.

Book value per share, excluding accumulated other comprehensive income (AOCI), was $153.47 as of Sep 30, 2022, up 19.7% year over year.

Statutory combined total adjusted capital was $8 billion on Sep 30, 2022, down 18.4% year over year.

As of Sep 30, 2022, the estimated combined RBC ratio was between 450% and 470%.

Share Buyback Program

Brighthouse bought back shares worth $136 million in the quarter under review, with another $52 million through Nov 3.

Zacks Rank

Brighthouse currently carries a Zacks Rank #5 (Strong Sell).

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

Performance of Other Life Insurers

Of the life insurance industry players that have reported third-quarter results so far, Voya Financial, Inc. VOYA and Reinsurance Group of America, Incorporated RGA beat the respective Zacks Consensus Estimate for earnings, while Lincoln National Corporation LNC missed the mark.

Voya Financial reported third-quarter 2022 adjusted operating earnings of $2.30 per share, which surpassed the Zacks Consensus Estimate by 84%. The bottom line however decreased 10.5% year over year. Total revenues amounted to $1.3 billion, which decreased 33.4% year over year.

Net investment income declined 22.4% year over year to $522 million. Meanwhile, fee income of $435 million decreased 10.7% year over year. Premiums totaled $607 million, up 11.6% from the year-ago quarter. Total expenses were $1.2 billion, down 10% from the year-ago quarter.

Reinsurance Group of America reported third-quarter 2022 adjusted operating earnings of $5.20 per share, which beat the Zacks Consensus Estimate by 76.8%. Moreover, the bottom line rebounded from the year-ago loss of $1.11. Net foreign currency fluctuations had an adverse effect of 15 cents per share on adjusted operating income.

Reinsurance Group's operating revenues of $4.2 billion beat the Zacks Consensus Estimate by 5%. The top line also improved 5.4% year over year on higher net premiums and other revenues. Net premiums of $3.2 billion rose 4.9% year over year. Investment income decreased 7.6% from the prior-year quarter to $374 million, reflecting lower variable investment income.

Lincoln National incurred third-quarter 2022 adjusted loss of $10.23 per share. The Zacks Consensus Estimate was of earnings of $1.93 per share. Earnings of $1.62 per share were reported in the prior-year quarter.

Adjusted operating revenues amounted to $4,630 million, which dropped 11% year over year. However, the top line beat the consensus mark by 5.9% and came above our estimate of $4,387.1 million. Lincoln National’s expenses of $7,935 million increased 62.8% year over year in the quarter under review.


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