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Brighthouse (BHF) Q1 Earnings and Revenues Beat, Rise Y/Y

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Brighthouse Financial Inc.'s (BHF - Free Report) 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.

Brighthouse Financial, Inc. Price, Consensus and EPS Surprise

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.

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.

First-quarter earnings of Lincoln Financial (LNC - Free Report) and Primerica (PRI - Free Report) beat the Zacks Consensus Estimate while that of American Equity Investment (AEL - Free Report) missed the same.

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