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A month has gone by since the last earnings report for Brighthouse Financial (BHF - Free Report) . Shares were flat in that time frame, underperforming the S&P 500.
Will the recent trend continue leading up to its next earnings release, or is Brighthouse Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Brighthouse Q1 Earnings and Revenues Beat, Rise Y/Y
Brighthouse Financial's first-quarter 2021 adjusted net income of $4.86 per share surpassed the Zacks Consensus Estimate by 100.3%. Moreover, the bottom line improved 86.9% year over year.
The reported quarter witnessed continued sales growth in annuities and lower expenses.
Behind the Headlines
Total operating revenues of $2.4 billion beat the Zacks Consensus Estimate by 9.1%. Moreover, the top line improved 16.2% year over year, driven by higher universal life and investment-type product policy fees, net investment income as well as other income.
Premiums of $184 million decreased 7.1% year over year.
Adjusted net investment income was $1.2 billion in the quarter under review, up 29% year over year. The improvement was driven primarily by higher alternative investment income. Investment income yield was 5.12%.
Total expenses decreased 37.6% year over year to $1.7 billion due to a decrease in policyholder benefits and claims and interest expense on debt. Corporate expenses were $203 million.
Quarterly Segmental Update
Annuities reported adjusted operating income of $336 million, up 6.3% year over year, reflecting higher net investment income, higher fees and lower reserves, partially offset by higher deferred acquisition costs ("DAC") amortization and higher expenses. Annuity sales increased 8% to $2.1 billion driven by higher sales of Shield Level Annuities and variable annuities with FlexChoice Access.
Life generated adjusted operating income of $44 million, up almost four fold year over year driven by higher net investment income, partially offset by a lower underwriting margin. Life insurance sales increased 44% to $23 million.
Adjusted operating earnings of Run-off were $76 million, rebounding from the year-ago loss of $70 million, reflecting higher net investment income.
Adjusted operating loss at Corporate & Other was $69 million, which was wider than the prior-year loss of $46 million due to higher total preferred stock dividends.
Financial Update
Cash and cash equivalents were $4 billion, down 2% from 2020 end.
Shareholders’ equity of $15 billion at the end of the quarter decreased 16.7% from 2020 end.
Book value per share, excluding accumulated other comprehensive income (AOCI), was $118.24 as of Dec 31, 2020, down 4.7% from 2020 end.
As of Mar 31,2021, estimated combined RBC ratio was between 500% and 520%.
Share Buyback Program
Brighthouse bought back shares worth $68 million in the quarter under review with another $55 million through May 7.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Brighthouse Financial has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Brighthouse Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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How Has BHF Performed 30 Days Post Earnings
A month has gone by since the last earnings report for Brighthouse Financial (BHF - Free Report) . Shares were flat in that time frame, underperforming the S&P 500.
Will the recent trend continue leading up to its next earnings release, or is Brighthouse Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Brighthouse Q1 Earnings and Revenues Beat, Rise Y/Y
Brighthouse Financial's first-quarter 2021 adjusted net income of $4.86 per share surpassed the Zacks Consensus Estimate by 100.3%. Moreover, the bottom line improved 86.9% year over year.
The reported quarter witnessed continued sales growth in annuities and lower expenses.
Behind the Headlines
Total operating revenues of $2.4 billion beat the Zacks Consensus Estimate by 9.1%. Moreover, the top line improved 16.2% year over year, driven by higher universal life and investment-type product policy fees, net investment income as well as other income.
Premiums of $184 million decreased 7.1% year over year.
Adjusted net investment income was $1.2 billion in the quarter under review, up 29% year over year. The improvement was driven primarily by higher alternative investment income. Investment income yield was 5.12%.
Total expenses decreased 37.6% year over year to $1.7 billion due to a decrease in policyholder benefits and claims and interest expense on debt. Corporate expenses were $203 million.
Quarterly Segmental Update
Annuities reported adjusted operating income of $336 million, up 6.3% year over year, reflecting higher net investment income, higher fees and lower reserves, partially offset by higher deferred acquisition costs ("DAC") amortization and higher expenses. Annuity sales increased 8% to $2.1 billion driven by higher sales of Shield Level Annuities and variable annuities with FlexChoice Access.
Life generated adjusted operating income of $44 million, up almost four fold year over year driven by higher net investment income, partially offset by a lower underwriting margin. Life insurance sales increased 44% to $23 million.
Adjusted operating earnings of Run-off were $76 million, rebounding from the year-ago loss of $70 million, reflecting higher net investment income.
Adjusted operating loss at Corporate & Other was $69 million, which was wider than the prior-year loss of $46 million due to higher total preferred stock dividends.
Financial Update
Cash and cash equivalents were $4 billion, down 2% from 2020 end.
Shareholders’ equity of $15 billion at the end of the quarter decreased 16.7% from 2020 end.
Book value per share, excluding accumulated other comprehensive income (AOCI), was $118.24 as of Dec 31, 2020, down 4.7% from 2020 end.
As of Mar 31,2021, estimated combined RBC ratio was between 500% and 520%.
Share Buyback Program
Brighthouse bought back shares worth $68 million in the quarter under review with another $55 million through May 7.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Brighthouse Financial has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Brighthouse Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.