A month has gone by since the last earnings report for Brighthouse Financial (
BHF Quick Quote BHF - Free Report) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.
Will the recent positive 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 catalysts.
Brighthouse Q1 Earnings & Revenues Miss, Fall Y/Y
Brighthouse Financial reported first-quarter 2023 adjusted net income of $2.86 per share, which missed the Zacks Consensus Estimate by 9.2%. The bottom line dropped 46% year over year. Our estimate was $3.01 per share.
The reported quarter witnessed lower revenues and higher expenses.
Behind the Headlines
Total operating revenues of $2 billion decreased 11.2% year over year due to lower universal life and investment-type product policy fees and net investment income. The top line missed the consensus mark by 4.1% but was almost in line with our estimate.
Premiums of $197 million increased 18.7% year over year. Our estimate was $234.4 million.
Adjusted net investment income was $1.1 billion in the quarter under review, down 5.2% year over year, due to lower alternative investment income, partially offset by asset growth. The investment income yield was 3.8%.
Total expenses increased to $1.9 billion from $10 million incurred in the year-ago quarter due to change in market risk benefits. It was almost in line with our estimate. Corporate expenses were $210 million.
Quarterly Segmental Update Annuities reported an adjusted operating income of $314 million, down 11.3% year over year, reflecting lower fees and higher interest credited, partially offset by higher net investment income. Annuity sales increased 35.2% to $2.8 billion, driven by higher sales of fixed deferred annuities. Life’s adjusted operating earnings were $1 million compared with earnings of $66 million in the year-ago quarter on lower net investment income and a lower underwriting margin. Life insurance sales increased 15% to $23 million.
Adjusted operating loss at
Run-off was $106 million against the year-ago earnings of $24 million due to lower net investment income and a lower underwriting margin, partially offset by lower expenses. Corporate & Other delivered an adjusted operating loss of $14 million, narrower than the prior-year loss of $64 million, on higher net investment income and tax benefit. Financial Update
Cash and cash equivalents were $3.7 billion, down 10.1% from 2021 end.
Shareholders’ equity of $5.8 billion at the end of the first quarter of 2023 increased 3.9% from 2022 end.
Book value per share, excluding accumulated other comprehensive income, was $138.62 as of Mar 31, 2023, up 30.3% year over year.
Statutory combined total adjusted capital was $8.2 billion on Mar 31, 2023, down 3.5% year over year.
As of Mar 31, 2023, the estimated combined RBC ratio was 460.
Share Buyback Program
Brighthouse bought back shares worth $62 million in the first quarter of 2023 and another $27 million year through May 5, 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
Currently, Brighthouse Financial has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Brighthouse Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.