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Brighthouse (BHF) Q4 Earnings Beat Estimates, Revenues Miss

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Brighthouse Financial Inc.'s BHF fourth-quarter 2020 adjusted net income of $3.03 per share surpassed the Zacks Consensus Estimate by 10.9%. Moreover, the bottom line improved 23.2% year over year.

The reported quarter witnessed continued sales growth in annuities and lower expenses. For 2020, adjusted net income was $10.19 per share.

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 revenues of $131 billion missed the Zacks Consensus Estimate by 93.7%. Moreover, the top line declined 57.2% year over year, mainly due to derivative loss of $2.4 billion.

Premiums of $191 million decreased 8.6% year over year.

Adjusted net investment income was $1 billion in the quarter under review, up 15.3% year over year. The improvement was driven primarily by higher alternative investment income. Investment income yield was 4.56%.

Corporate expenses of $236 million pretax decreased 16.6% year over year.
Total expenses declined 14.4% year over year to $1.4 billion due to a decrease in policyholder benefits and claims and interest expense on debt.

Quarterly Segmental Update

Annuities reported adjusted operating income of $293 million, up 10.6% year over year, reflecting lower expenses, higher net investment income, higher fees, and lower deferred acquisition costs (DAC) amortization. Annuity sales increased 57.7% to $2.9 billion.

Life generated adjusted operating income of $13 million, down 82.7% year over year due to lower underwriting margin, partially offset by higher net investment income and lower expenses. Life insurance sales were $15 million, which compared favorably with the prior-year sales of $12 million.

Adjusted operating earnings of Run-off were $25 million, up 316.7% year over year, reflecting higher net investment income, partially offset by a lower underwriting margin.

Adjusted operating loss at Corporate & Other was $142 million, which was wider than the prior-year loss of $64 million.

Financial Update

The company’s cash and cash equivalents were $4.1 billion, up 42.8% year over year.

Shareholders’ equity of $18 billion at the end of the quarter increased 11.4% year over year.

Book value per share, excluding accumulated other comprehensive income (AOCI), was $124.10 as of Dec 31, 2020, up 5.1% year over year.

Share Buyback Program

Brighthouse bought back shares worth $97 million in the quarter under review. Moreover, the company also announced repurchase of up to an additional $200 million of common stock.

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.

Fourth-quarter earnings of Chubb Limited CB, Reinsurance Group of America, Incorporated RGA, and Markel Corporation MKL beat the respective Zacks Consensus Estimate.

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