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What Awaits Brighthouse Financial (BHF) in Q1 Earnings?

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Brighthouse Financial, Inc. (BHF - Free Report) is set to report first-quarter 2019 earnings on May 6, after market close. The company delivered positive surprise in two of the last four reported quarters.

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

Brighthouse Financial’s first-quarter results are likely to benefit from its compelling portfolio of life and annuity products and strong market presence

Improved annuity sales are likely to aid its life insurance business.

Annuity sales are expected to benefit from better performance of Shield and fixed indexed annuities. Its Index Horizon, a fixed indexed annuity product sold through MassMutual, has already gained traction, as evident from sales of more than $1 billion in 2018. Launch of products (it launched Brighthouse SmartCare, a new hybrid life insurance product, in the first quarter of 2019), strong distribution relationships and prudent marketing are also expected to drive sales.

Investment income is likely to benefit from an improved rate environment. The company’s focus on placing treasuries into higher-yielding spread assets and growth in average invested assets are likely to drive investment income.

Brighthouse Financial is well on track to exit its Transition Service Agreements with MetLife in a bid to contain costs.

Continued share buybacks should provide additional upside to the bottom line.

Expenses are likely to rise given increased investments.

The Zacks Consensus Estimate for earnings per share for the quarter to be reported is pegged at $2.12, implying a decrease of 10.2% from the year-ago reported figure.

What Our Quantitative Model Predicts

Our proven model suggest that Brighthouse Financial is likely to beat on earnings this reporting season. This is because the stock has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Brighthouse Financial has an Earnings ESP of +0.35%. This is because the Most Accurate Estimate of $2.13 is pegged higher than the Zacks Consensus Estimate of $2.12. 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 #2.

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

Other Stocks to Consider

Some stocks from the insurance industry also with the right combination of elements to surpass estimates this time around are as follows:

Essent Group Ltd. (ESNT - Free Report) is set to report first-quarter earnings on May 3. The company has an Earnings ESP of +3.13% and a Zacks Rank #3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Everest Re Group, Ltd. has an Earnings ESP of +3.17% and a Zacks Rank of 3. The company is scheduled to release first-quarter earnings on May 6.

Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +1.10% and a Zacks Rank of 3. The company is slated to announce first-quarter earnings on May 8.

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