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Brighthouse (BHF) Q4 Earnings Beat, Revenues Miss Estimates
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Brighthouse Financial Inc.'s (BHF - Free Report) fourth-quarter 2019 adjusted net income of $2.46 per share surpassed the Zacks Consensus Estimate by 5.1%. Moreover, the bottom line improved 57.7% year over year.
The reported quarter witnessed continued sales growth in annuities. For 2019, adjusted net income was $9.58 per share.
Brighthouse Financial, Inc. Price, Consensus and EPS Surprise
Total revenues of $306 billion missed the Zacks Consensus Estimate by 85.2%. Moreover, the top line declined 92.4% year over year, mainly led by derivative loss of $1.9 billion.
Premiums of $209 million decreased 6.3% year over year.
Adjusted net investment income was $904 million in the quarter under review, up 4.8% year over year. The improvement was driven by asset growth. Investment income yield was 4.32%.
Corporate expenses of $283 million pretax increased 14.1% year over year.
Total expenses declined 25.1% year over year to $1.7 billion due to a decrease in amortization of deferred acquisition costs and value of business acquired, lower interest credited to policyholder account balances, and decline in policyholder benefits & claims.
Quarterly Segmental Update
Annuities reported adjusted operating income of $265 million, up 51.4% year over year, reflecting lower deferred acquisition costs amortization, lower reserves and higher net investment income, partially offset by higher expenses and lower fees. Annuity sales increased 10.2% to $1.9 billion.
Life generated adjusted operating income of $75 million, up 17.2% year over year on lower claims and higher net investment income. Life insurance sales were $12 million, which compared favorably with prior-year sales of $4 million.
Adjusted operating earnings of Run-off was $6 million, down 66.7% year over year.
Adjusted operating loss at Corporate & Other was $64 million, which was narrower than the prior-year loss of $71 million on higher net investment income.
Financial Update
The company’s cash and cash equivalents were $2.9 billion, down 30.6% year over year.
Shareholders’ equity of $16.2 billion at the end of the quarter decreased 12.2% year over year.
Book value per share, excluding accumulated other comprehensive income (AOCI), was $118.08 as of Dec 31, 2019, up 1.3% year over year.
Share Buyback Program
Brighthouse bought back shares worth $128 million in the quarter under review. Moreover, the company also announced to repurchase up to an additional $500 million of common stock.
Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. (BRO - Free Report) and RLI Corp. (RLI - Free Report) beat estimates, while that of Principal Financial (PFG - Free Report) met the same.
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Brighthouse (BHF) Q4 Earnings Beat, Revenues Miss Estimates
Brighthouse Financial Inc.'s (BHF - Free Report) fourth-quarter 2019 adjusted net income of $2.46 per share surpassed the Zacks Consensus Estimate by 5.1%. Moreover, the bottom line improved 57.7% year over year.
The reported quarter witnessed continued sales growth in annuities. For 2019, adjusted net income was $9.58 per share.
Brighthouse Financial, Inc. Price, Consensus and EPS Surprise
Brighthouse Financial, Inc. price-consensus-eps-surprise-chart | Brighthouse Financial, Inc. Quote
Behind the Headlines
Total revenues of $306 billion missed the Zacks Consensus Estimate by 85.2%. Moreover, the top line declined 92.4% year over year, mainly led by derivative loss of $1.9 billion.
Premiums of $209 million decreased 6.3% year over year.
Adjusted net investment income was $904 million in the quarter under review, up 4.8% year over year. The improvement was driven by asset growth. Investment income yield was 4.32%.
Corporate expenses of $283 million pretax increased 14.1% year over year.
Total expenses declined 25.1% year over year to $1.7 billion due to a decrease in amortization of deferred acquisition costs and value of business acquired, lower interest credited to policyholder account balances, and decline in policyholder benefits & claims.
Quarterly Segmental Update
Annuities reported adjusted operating income of $265 million, up 51.4% year over year, reflecting lower deferred acquisition costs amortization, lower reserves and higher net investment income, partially offset by higher expenses and lower fees. Annuity sales increased 10.2% to $1.9 billion.
Life generated adjusted operating income of $75 million, up 17.2% year over year on lower claims and higher net investment income. Life insurance sales were $12 million, which compared favorably with prior-year sales of $4 million.
Adjusted operating earnings of Run-off was $6 million, down 66.7% year over year.
Adjusted operating loss at Corporate & Other was $64 million, which was narrower than the prior-year loss of $71 million on higher net investment income.
Financial Update
The company’s cash and cash equivalents were $2.9 billion, down 30.6% year over year.
Shareholders’ equity of $16.2 billion at the end of the quarter decreased 12.2% year over year.
Book value per share, excluding accumulated other comprehensive income (AOCI), was $118.08 as of Dec 31, 2019, up 1.3% year over year.
Share Buyback Program
Brighthouse bought back shares worth $128 million in the quarter under review. Moreover, the company also announced to repurchase up to an additional $500 million of common stock.
Zacks Rank & Peer Releases
Brighthouse currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players from the insurance industry having reported fourth-quarter earnings so far, the bottom-line results of Brown & Brown, Inc. (BRO - Free Report) and RLI Corp. (RLI - Free Report) beat estimates, while that of Principal Financial (PFG - Free Report) met the same.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>