Brighthouse Financial Inc.'s ( BHF Quick Quote BHF - Free Report) third-quarter 2021 adjusted operating income of $6.17 per share outpaced the Zacks Consensus Estimate by 88.1%. The bottom line improved 47.2% year over year. The quarter witnessed higher annuity and life sales, improved net investment income, higher premiums, and lower expenses. Behind the Headlines
Operating revenues of $2.5 billion increased 14.4% year over year due to higher net investment income and other revenues, and higher premiums.
Premiums of $193 million increased 4.9% year over year. Adjusted net investment income was $1.3 billion in the quarter under review, up 28.6% year over year driven by higher alternative investment income and asset growth. Net investment income yield came in at 5.16%. Corporate expenses of $222 million pre-tax increased 1.8% sequentially. Total expenses decreased 51.3% year over year to $2 billion on lower interest expense on debt, a decrease in policy-holder benefits and claims, and decreased amortization of deferred acquisition costs (DAC) and value of business acquired (VOBA). Quarterly Segment Update
Annuities’ adjusted operating income of $385 million decreased 0.5% year over year, reflecting higher net investment income and fees partially offset by higher expenses, higher reserves, and higher DAC amortization. Annuity sales increased 1% year over year driven by record sales of variable and Shield Level annuities, which increased a combined 54% primarily offset by lower sales of fixed-rate annuities.
Life generated adjusted operating income of $110 million, up 44.7% year over year. The results indicate higher net investment income, partially offset by a lower underwriting margin. Life sales surged 108% year over year, driven by sales of SmartCare. The Run-off segment reported adjusted earnings of $38 million, which was against the prior-year quarter’s adjusted loss of $1.1 billion. The results reflect higher net investment income partially offset by a lower underwriting margin. Adjusted operating loss at Corporate & Other was $83 million, which was wider than the loss of $13 million incurred in the year-ago quarter. The wider loss reflects a lower tax benefit. Financial Update
As of Sep 30, 2021, cash and cash equivalents were $4.1 billion, down 33.6% year over year.
Shareholders’ equity of $16 billion at third quarter-end decreased 12.2% year over year. Book value per share, excluding accumulated other comprehensive income was $128.24 as of Sep 30, 2021, down 3.2% year over year. Share Buyback Program
In the third quarter, Brighthouse Financial repurchased shares worth $149 million with an additional $61 million of shares repurchased on a trade-date basis through Nov 2, 2021.
Brighthouse Financial currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Performance of Insurers
Of the insurance industry players, which have reported third-quarter results so far, earnings of
Athene Holding Ltd. , American Financial Group ( AFG Quick Quote AFG - Free Report) and Arch Capital Group Ltd. ( ACGL Quick Quote ACGL - Free Report) beat the respective Zacks Consensus Estimate.