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Brighthouse Financial (BHF) to Report Q2 Earnings: What's Up?

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Brighthouse Financial (BHF - Free Report) is set to report second-quarter 2019 earnings on Aug 5, after market close. The company delivered negative surprise in the last reported quarter.

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

Brighthouse Financial’s second-quarter results are likely to benefit from its compelling portfolio of life and annuity products and a solid 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. Index Horizon, a fixed indexed annuity product sold through MassMutual, has been gaining traction, as evident from sales of more than $1 billion in 2018. Launch of products (such as 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. The company estimates alternative investment income to be higher in the second quarter of 2019.

Brighthouse Financial is well on track to exit its Transition Service Agreements with MetLife. This move is likely to reduce expenses.

Continued share buybacks should bolster the bottom line.

Expenses are likely to rise given increased investments.

The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $2.23, implying an increase of 75.6% from the year-ago reported figure.

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 the stock needs to have the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). But this is not the case as you can see below:

Earnings ESP: Brighthouse Financial has an Earnings ESP of -0.11%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Brighthouse Financial carries a Zacks Rank #3.

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.

Stocks to Consider

Some stocks from the insurance industry with the perfect mix of elements to outshine estimates this time around are as follows:

Voya Financial (VOYA - Free Report) is set to report second-quarter earnings on Aug 6. The company has an Earnings ESP of +1.42% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Financial Group (AFG - Free Report) has an Earnings ESP of +0.66% and a Zacks Rank of 3. The company is scheduled to release second-quarter earnings on Aug 6.

American International Group (AIG - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank of 2. The company is slated to announce second-quarter earnings on Aug 7.

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