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Brighthouse Financial Inc. (BHF - Free Report) reported second-quarter 2023 adjusted net income of $4.13 per share, which beat the Zacks Consensus Estimate by 16.3%. The bottom line increased 25.5% year over year.
The reported quarter witnessed higher revenues and lower expenses.
Brighthouse Financial, Inc. Price, Consensus and EPS Surprise
Total operating revenues of $2 billion increased 3.8% year over year, driven by higher premiums, net investment income and other income. The top line beat the consensus mark by 4.4%.
Premiums of $211 million increased 26.3% year over year. Our estimate was $168.8 million.
Adjusted net investment income was $1.2 billion in the quarter under review, up 13.9% year over year, driven by asset growth and higher interest rates. The investment income yield was 4.2%.
Total expenses dropped 70.4% to $500 million due to favorable changes in market risk benefits. Our estimate was $605.2 million. Corporate expenses, pretax, were $210 million, up 5.2% year over year.
Quarterly Segmental Update
Annuities reported an adjusted operating income of $291 million, down 9.1% year over year, attributable to higher expenses, lower fees and higher reserves, partially offset by higher net investment income. Annuity sales decreased 0.5% to $2.5 billion.
Life’s adjusted operating earnings were $15 million compared with earnings of $29 million in the year-ago quarter. The year-over-year decline was due to higher expenses and a lower underwriting margin, partially offset by higher net investment income. Life insurance sales increased 31.6% to $25 million.
Adjusted operating loss at Run-off was $16 million, narrower than the year-ago loss of $157 million.
Corporate & Other delivered an adjusted operating loss of $19 million, narrower than the prior-year loss of $48 million, reflecting higher net investment income and lower expenses, partially offset by a lower tax benefit.
Financial Update
Cash and cash equivalents were $3.7 billion, down 26.3% year over year.
Shareholders’ equity of $4.9 billion at the end of the second quarter of 2023 decreased 31.4% year over year.
Book value per share, excluding accumulated other comprehensive income, was $137.80 as of Jun 30, 2023, up 4.3% year over year.
Statutory combined total adjusted capital was $7.6 billion as of Jun 30, 2023, down 7.3% year over year.
As of Jun 30, 2023, the estimated combined risk based capital ratio was in the range of 430%-450%.
Share Buyback Program
Brighthouse bought back shares worth $64 million in the second quarter of 2023, with another $26 million year through Aug 4, 2023.
Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2023 adjusted operating earnings of $2.31 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 38.3% year over year on strong net underwriting results. Adjusted operating revenues amounted to $347 billion, which increased 43.4% year over year. The top line also beat the Zacks Consensus Estimate by 8.8%.
Net investment income declined 6.2% year over year to $545 million. Meanwhile, fee income of $474 million increased 14.8% year over year. Premiums totaled $677 million, up 13.4% from the year-ago quarter. Total benefits and expenses were $1.6 billion, up 17.2% from the year-ago quarter. As of Jun 30, 2023, VOYA’s assets under management, and assets under administration and advisement totaled $789 million.
Lincoln National Corporation (LNC - Free Report) reported second-quarter 2023 adjusted earnings of $2.02 per share, which outpaced the Zacks Consensus Estimate by 5.2%. However, the bottom line slipped 5.2% year over year. Adjusted operating revenues grew 5.7% year over year to $4,730 million. The top line beat the consensus mark by 2.8%. Total expenses plunged 48.8% year over year to $2,327 million in the quarter under review and remained below our estimate of $3,103.4 million due to the incidence of a significant MRB gain.
The Annuities segment recorded an operating income of $271 million, which decreased 8% year over year and missed the consensus estimate by 6.3%. The metric suffered from reduced prepayment income and increased expenses. Operating income in the Retirement Plan Services segment came in at $47 million, which plunged 14.5% year over year and missed our estimate of $54.1 million due to a decline in prepayment income and an elevated expense level. The Life Insurance segment reported an operating income of $33 million in the quarter under review, falling 47.6% year over year, due to run-rate impact stemming from the year-ago annual review of DAC and increased expenses.
American Equity Investment Life Holding Company reported second-quarter 2023 adjusted net earnings of $1.62 per share, which missed the Zacks Consensus Estimate by 1.8%. The bottom line remained unchanged year over year. Operating total revenues were $633.5 million, down 4.1% year over year due to lower premiums and other considerations and net investment income.
Premiums and other considerations decreased 34.3% year over year to $2.5 million. The figure was lower than our estimate of $5.9 million. Net investment income decreased 8.3% on a year-over-year basis to $542 million. The downside was due to a 6-basis point decline in the effective yield on the investment portfolio, lower invested assets, and a decrease in cash and short-term investments at the holding company level. The investment spread was 2.57%, down from 2.64% in the year-ago quarter.
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Brighthouse (BHF) Q2 Earnings & Revenues Beat, Rise Y/Y
Brighthouse Financial Inc. (BHF - Free Report) reported second-quarter 2023 adjusted net income of $4.13 per share, which beat the Zacks Consensus Estimate by 16.3%. The bottom line increased 25.5% year over year.
The reported quarter witnessed higher revenues and lower expenses.
Brighthouse Financial, Inc. Price, Consensus and EPS Surprise
Brighthouse Financial, Inc. price-consensus-eps-surprise-chart | Brighthouse Financial, Inc. Quote
Behind the Headlines
Total operating revenues of $2 billion increased 3.8% year over year, driven by higher premiums, net investment income and other income. The top line beat the consensus mark by 4.4%.
Premiums of $211 million increased 26.3% year over year. Our estimate was $168.8 million.
Adjusted net investment income was $1.2 billion in the quarter under review, up 13.9% year over year, driven by asset growth and higher interest rates. The investment income yield was 4.2%.
Total expenses dropped 70.4% to $500 million due to favorable changes in market risk benefits. Our estimate was $605.2 million. Corporate expenses, pretax, were $210 million, up 5.2% year over year.
Quarterly Segmental Update
Annuities reported an adjusted operating income of $291 million, down 9.1% year over year, attributable to higher expenses, lower fees and higher reserves, partially offset by higher net investment income. Annuity sales decreased 0.5% to $2.5 billion.
Life’s adjusted operating earnings were $15 million compared with earnings of $29 million in the year-ago quarter. The year-over-year decline was due to higher expenses and a lower underwriting margin, partially offset by higher net investment income. Life insurance sales increased 31.6% to $25 million.
Adjusted operating loss at Run-off was $16 million, narrower than the year-ago loss of $157 million.
Corporate & Other delivered an adjusted operating loss of $19 million, narrower than the prior-year loss of $48 million, reflecting higher net investment income and lower expenses, partially offset by a lower tax benefit.
Financial Update
Cash and cash equivalents were $3.7 billion, down 26.3% year over year.
Shareholders’ equity of $4.9 billion at the end of the second quarter of 2023 decreased 31.4% year over year.
Book value per share, excluding accumulated other comprehensive income, was $137.80 as of Jun 30, 2023, up 4.3% year over year.
Statutory combined total adjusted capital was $7.6 billion as of Jun 30, 2023, down 7.3% year over year.
As of Jun 30, 2023, the estimated combined risk based capital ratio was in the range of 430%-450%.
Share Buyback Program
Brighthouse bought back shares worth $64 million in the second quarter of 2023, with another $26 million year through Aug 4, 2023.
Zacks Rank
Brighthouse 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 Other Life Insurers
Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2023 adjusted operating earnings of $2.31 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 38.3% year over year on strong net underwriting results. Adjusted operating revenues amounted to $347 billion, which increased 43.4% year over year. The top line also beat the Zacks Consensus Estimate by 8.8%.
Net investment income declined 6.2% year over year to $545 million. Meanwhile, fee income of $474 million increased 14.8% year over year. Premiums totaled $677 million, up 13.4% from the year-ago quarter. Total benefits and expenses were $1.6 billion, up 17.2% from the year-ago quarter. As of Jun 30, 2023, VOYA’s assets under management, and assets under administration and advisement totaled $789 million.
Lincoln National Corporation (LNC - Free Report) reported second-quarter 2023 adjusted earnings of $2.02 per share, which outpaced the Zacks Consensus Estimate by 5.2%. However, the bottom line slipped 5.2% year over year. Adjusted operating revenues grew 5.7% year over year to $4,730 million. The top line beat the consensus mark by 2.8%. Total expenses plunged 48.8% year over year to $2,327 million in the quarter under review and remained below our estimate of $3,103.4 million due to the incidence of a significant MRB gain.
The Annuities segment recorded an operating income of $271 million, which decreased 8% year over year and missed the consensus estimate by 6.3%. The metric suffered from reduced prepayment income and increased expenses. Operating income in the Retirement Plan Services segment came in at $47 million, which plunged 14.5% year over year and missed our estimate of $54.1 million due to a decline in prepayment income and an elevated expense level. The Life Insurance segment reported an operating income of $33 million in the quarter under review, falling 47.6% year over year, due to run-rate impact stemming from the year-ago annual review of DAC and increased expenses.
American Equity Investment Life Holding Company reported second-quarter 2023 adjusted net earnings of $1.62 per share, which missed the Zacks Consensus Estimate by 1.8%. The bottom line remained unchanged year over year. Operating total revenues were $633.5 million, down 4.1% year over year due to lower premiums and other considerations and net investment income.
Premiums and other considerations decreased 34.3% year over year to $2.5 million. The figure was lower than our estimate of $5.9 million. Net investment income decreased 8.3% on a year-over-year basis to $542 million. The downside was due to a 6-basis point decline in the effective yield on the investment portfolio, lower invested assets, and a decrease in cash and short-term investments at the holding company level. The investment spread was 2.57%, down from 2.64% in the year-ago quarter.