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Brighthouse Financial (BHF) Q4 Earnings: What to Expect

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Brighthouse Financial, Inc. (BHF - Free Report) is set to report fourth-quarter 2018 earnings on Feb 11, after market close. The company delivered positive surprise in two of the three reported quarters of 2018.

Let’s see what’s in store for the company in the yet-to-be reported quarter.

Brighthouse Financial’s fourth-quarter results are likely to benefit from its compelling portfolio of life and annuity products and strong market presence.

Its life insurance business is expected to show improvement given the company’s efforts to ramp up new sales.

Annuity sales are likely to increase on the back of better performance of Shield and fixed indexed annuities. Launch of products, strong distribution relationships and prudent marketing are expected to drive sales.

All these aspects are likely to lead to an improvement in premiums.

Investment income is likely to benefit from accelerated pace in rate hikes. The company’s focus on placing treasuries into higher-yielding spread assets and growth in average invested assets are likely to drive investment income.

Brighthouse Financial is well on track to exit its Transition Service Agreements with MetLife in a bid to contain costs.

Lower taxes and an impact of share buybacks provided additional upside to the bottom line.

Expenses are expected to increase as the company continued its investments.

The Zacks Consensus Estimate for earnings per share in the quarter is pegged at $1.74 on revenues of $2.05 billion. This indicates year-over-year increase of 370.3% and 9% respectively.

What Our Quantitative Model Predicts

Our proven model does not conclusively show that Brighthouse Financial is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Brighthouse Financial has an Earnings ESP of -5.53%. This is because the Most Accurate Estimate of $1.65 is pegged lower than the Zacks Consensus Estimate of $1.74. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Brighthouse Financial, Inc. Price and EPS Surprise

Zacks Rank: Brighthouse Financial carries a Zacks Rank #4 (Sell).

We caution against Zacks Rank #4 or 5 (Strong Sell) stocks going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:

Ares Capital Corporation (ARCC - Free Report) is set to report fourth-quarter earnings on Feb 12. The company has an Earnings ESP of +1.10% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +6.84% and a Zacks Rank of 1. The company is scheduled to release fourth-quarter earnings on Feb 14.

Agree Realty Corporation (ADC - Free Report) has an Earnings ESP of +0.88% and a Zacks Rank of 3. The company is slated to announce fourth-quarter earnings on Feb 21.

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