Brighthouse Financial's (BHF) Q4 Earnings & Revenues Beat
Brighthouse Financial Inc.'s BHF fourth-quarter 2021 adjusted operating income of $5.18 per share outpaced the Zacks Consensus Estimate by 49.7%. The bottom line improved 71% year over year.
The quarter witnessed higher life sales and universal life and investment-type product policy fees.
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 $2.3 billion increased 8.1% year over year driven by higher universal life and investment-type product policy fees. The top line beat the consensus estimate by 5.6%.
Premiums of $168 million decreased 12% year over year.
Adjusted net investment income was $1.2 billion, up 15.7% year over year, driven by higher alternative investment income and asset growth. Net investment income yield came in at 4.66%.
Corporate expenses of $222 million pre-tax increased 1.8% sequentially.
Total expenses increased 36.9% year over year to $2 billion on higher policy-holder benefits and claims, interest credited to policyholder account balances, other expenses and amortization of deferred acquisition costs (DAC) and value of business acquired (VOBA).
Quarterly Segment Update
Annuities’ adjusted operating income of $390 million increased 33.1% year over year, reflecting higher net investment income, lower deferred acquisition costs ("DAC") amortization and higher fees, partially offset by higher expenses. Annuity sales were flat year over year as record total sales of variable and Shield Level annuities, which increased 36% over 2020, were offset by lower sales of fixed deferred annuities.
Life generated an adjusted operating income of $67 million, up more than five-fold year over year. The results indicate higher net investment income as well as higher underwriting margins. Life sales surged 98% year over year, driven by sales of SmartCare.
The Run-off segment reported an adjusted loss of $45 million against the prior-year quarter’s adjusted income of $25 million. The results reflected higher expenses and lower underwriting margins.
Adjusted operating loss at Corporate & Other was $89 million, narrower than a loss of $142 million incurred in the year-ago quarter. The narrower loss reflects a higher tax benefit.
Full-Year Highlights
Adjusted operating income of $21.50 per share more than doubled year over year.
Brighthouse Financial reported record total sales of variable and Shield Level annuities.
Adjusted net investment income increased 39.5% to $4.9 billion.
Financial Update
As of Dec 31, 2021, cash and cash equivalents were $4.5 billion, up 8.9% year over year.
Shareholders’ equity of $16.2 billion at 2021-end decreased 10.4% year over year.
Book value per share, excluding accumulated other comprehensive income was $131.90, as of Dec 31, 2021, up 6.3% year over year.
Share Buyback Program
Brighthouse Financial repurchased shares worth $499 million in 2021, achieving the target of returning $1.5 billion by 2021, with another $57 million worth of shares through Feb 8, 2022.
Zacks Rank
Brighthouse Financial currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Life Insurers
Of the life insurance industry players that have reported fourth-quarter results so far, Voya Financial, Inc VOYA beat the Zacks Consensus Estimate for earnings while Lincoln National Corporation LNC and Reinsurance Group of America, Incorporated RGA missed expectations.
Voya Financial reported fourth-quarter 2021 adjusted operating earnings of $1.90 per share, which surpassed the Zacks Consensus Estimate by 28.4%. The bottom line remained flat year over year. Total revenues amounted to $1.7 billion, which declined 19.2% year over year in the fourth quarter.
As of Dec 31, 2021, VOYA’s assets under management and assets under administration & advisement totaled $739 billion.
Lincoln National’s fourth-quarter 2021 adjusted earnings of $1.56 per share missed the Zacks Consensus Estimate of $1.98 and declined from the prior-year figure of $1.78 per share. Adjusted operating revenues increased 2.4% year over year to $4.8 billion and beat the consensus mark of $4.7 billion.
Even though the ongoing pandemic is likely to continue hurting results, Lincoln National is expected to witness rising earnings per share on the back of its Spark Initiative.
Reinsurance Group reported fourth-quarter 2021 adjusted operating loss of 56 cents per share against the Zacks Consensus Estimate of earnings of 83 cents per share. RGA had reported an operating income of $1.19 per share in the prior-year quarter. Higher COVID-19 mortality claims weighed on the performance. Operating revenues of $4.3 billion increased 5.8% year over year. The top line beat the Zacks Consensus Estimate by 2.1%.
RGA’s net premiums of $3.4 billion rose 4.5% year over year. Investment income increased 18%, reflecting a 5% higher average asset balance and strong variable investment income. Average investment yield increased 50 bps to 4.7%, primarily due to higher variable investment income.
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