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Brighthouse (BHF) Q2 Earnings & Revenues Beat, Fall Y/Y

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Brighthouse Financial Inc.'s (BHF - Free Report) second-quarter 2022 adjusted net income of $3.29 per share surpassed the Zacks Consensus Estimate by 16.3%. The bottom line decreased 38.2% year over year.

The reported quarter witnessed higher expenses and lower adjusted net investment income.

Brighthouse Financial, Inc. Price, Consensus and EPS Surprise

 

Behind the Headlines

Total operating revenues of $2.1 billion decreased 8.7% year over year due to lower universal life and investment-type product policy fees and net investment income. The top line, however, beat the consensus mark by about 1%.

Premiums of $167 million increased 3.1% year over year.

Adjusted net investment income was $1.1 billion in the quarter under review, down 12.1% year over year, due to lower alternative investment income, partially offset by asset growth. The investment income yield was 3.92%.

Total expenses increased 56.1% year over year to $2.6 billion due to an increase in policyholder benefits and claims, interest credited to policyholder account balances and amortization of DAC and VOBA. Corporate expenses were $201 million.

Quarterly Segmental Update

Annuities reported an adjusted operating income of $204 million, down 47.4% year over year, reflecting higher reserves, lower fees and higher deferred acquisition costs amortization, partially offset by lower expenses. Annuity sales decreased 8% to $2.5 billion.

Life generated an adjusted operating income of $23 million, down 66.7% year over year due to lower net investment income and higher DAC amortization, partially offset by lower expenses. Life insurance sales decreased 27% to $19 million.

Adjusted operating loss at Run-off was $164 million against the year-ago earnings of $122 million, reflecting lower net investment income, partially offset by a higher underwriting margin and lower expenses.

Adjusted operating loss at Corporate & Other was $39 million, which was narrower than the prior-year loss of $93 million,  on higher net investment income and a higher tax benefit.

Financial Update

Cash and cash equivalents were $5.1 billion, up 3.9% from 2021 end.

Shareholders’ equity of $10.2 billion at the end of the quarter decreased 36.8% from 2021 end.

Book value per share, excluding accumulated other comprehensive income (AOCI), was $158.51 as of Jun 30, 2022, up 31.4% year over year.

Statutory combined total adjusted capital was $8.2 billion on Jun 30, 2022, down 12.8% year over year

As of Jun 30, 2022, the estimated combined RBC ratio was between 470% and 490%.

Share Buyback Program

Brighthouse bought back shares worth $132 million in the quarter under review with another $58 million through Aug 5.

Zacks Rank

Brighthouse currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Of the insurance industry players that have reported second-quarter results so far, Sun Life Financial Inc. (SLF - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) beat the Zacks Consensus Estimate while Lincoln National Corporation (LNC - Free Report) missed the mark.

Sun Life’s underlying net income of $1.19 per share beat the Zacks Consensus Estimate by 10.2%. The bottom line decreased 2.4% year over year. Insurance sales increased 19.5% year over year to $690.8 million (C$736 million), driven by increased sales in Canada and United States. Wealth sales increased 20% year over year to $53.8 billion (C$57.4 billion) in the quarter under review. Value of new business improved 10% to $254.4 million (C$271 million).

Reinsurance Group of America’s adjusted operating earnings of $5.78 per share, which beat the Zacks Consensus Estimate by 112.5% and increased 44.5% from the year-ago quarter’s figure. Operating revenues of $4.1 billion beat the Zacks Consensus Estimate by 3.3% and improved 2.9% year over year on higher net premiums. Net premiums of $3.2 billion rose 4.3% year over year.

Lincoln National’s adjusted earnings of $2.23 per share lagged the Zacks Consensus Estimate by 5.1% and fell 29.7% year over year. Adjusted operating revenues of $4,641 million declined 5.3% year over year but outpaced the consensus mark by 4.1%.

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