Back to top

What's in Store for Brighthouse Financial (BHF) Q3 Earnings?

Read MoreHide Full Article

Brighthouse Financial, Inc. (BHF - Free Report) is set to report third-quarter 2018 earnings on Nov 5, after the market closes. The company witnessed a negative surprise of 37.44% in the second quarter.

Let’s see, what is in store for the company this yet-to-be reported quarter.

Brighthouse Financial’s premiums are likely to have benefited from its compelling portfolio of life and annuity products coupled with its strong market presence.

The company’s efforts to ramp up its new sales of life insurance should have favoured its life insurance business in turn.

Its growing asset base and an ongoing repositioning of the investment portfolio coupled with an improving rate environment is expected to have contributed to an improved investment income. Brighthouse Financial diverted $2 billion of treasuries into higher-yielding spread assets to aid its investment income.

Annuity sales are anticipated to have grown on the back of better performing Shield and fixed indexed annuities. Strong distribution relationships and prudent marketing should have driven this upside.

Brighthouse Financial is well on its track to exit its Transition Service Agreements with MetLife in a bid to contain costs. Nonetheless, expenses are expected to have remained elevated, weighing on the company’s margin expansion. Also, the company expects third-quarter corporate expenses to be considerably high.

Nonetheless, lower taxes and an impact of share buybacks might have boosted the bottom line.

The Zacks Consensus Estimate for earnings in the quarter to be reported is pegged at $2.19 per share on revenues of $2.05 billion.

What Our Quantitative Model Predicts

Our proven model does not conclusively show that Brighthouse Financial is likely to beat on earnings this reporting season. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Brighthouse Financial has an Earnings ESP of -1.02%. This is because the Most Accurate Estimate of $2.17 is pegged lower than the Zacks Consensus Estimate of $2.19. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Brighthouse Financial, Inc. Price and EPS Surprise

Zacks Rank: Brighthouse Financial carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP leaves surprise prediction inconclusive. Thus, this combination decreases the odds of a possible earnings surprise.

We caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks worth considering from the finance sector with the right combination of elements to surpass estimates this time around are as follows:

Cboe Global Markets, Inc. (CBOE - Free Report) is set to report third-quarter earnings on Nov 2 and has an Earnings ESP of +0.99%. The company is a Zacks #3 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

CNA Financial Corp. (CNA - Free Report) has an Earnings ESP of +4.42% and a Zacks Rank #2. The company is set to announce third-quarter earnings on Nov 5.  

Physicians Realty Trust (DOC - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank of 3. The company is set to release third-quarter earnings on Nov 2. 

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>

More from Zacks Analyst Blog

You May Like