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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

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 and RLI Corp. RLI beat estimates, while that of Principal Financial PFG met the same.

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