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Why Is Brighthouse Financial (BHF) Up 5.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Brighthouse Financial (BHF - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brighthouse Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Brighthouse Financial Inc.'s first-quarter 2022 adjusted net income of $4.07 per share surpassed the Zacks Consensus Estimate by 15.3%. The bottom line decreased 16.2% year over year.
The reported quarter witnessed higher expenses, lower adjusted net investment income and lower premiums.
Behind the Headlines
Total operating revenues of $2.3 billion decreased 5.5% year over year due to lower universal life and investment-type product policy fees, net investment income as well as premiums. Premiums of $166 million decreased 9.8% year over year.
Adjusted net investment income was $1.1 billion in the quarter under review, down 2.9% year over year, due to lower alternative investment income, partially offset by asset growth. The investment income yield was 4.36%.
Total expenses increased 13.3% year over year to $1.9 billion due to an increase in policyholder benefits and claims and amortization of DAC and VOBA. Corporate expenses were $208 million.
Quarterly Segmental Update
Annuities reported an adjusted operating income of $311 million, down 7.4% year over year, reflecting higher reserves, lower fees and higher deferred acquisition costs ("DAC") amortization, partially offset by lower expenses. Annuity sales decreased 3% to $2.1 billion.
Life generated an adjusted operating income of $26 million, down 38.1% year over year due to lower net investment income and underwriting margin, partially offset by lower expenses. Life insurance sales decreased 13% to $20 million.
Adjusted operating earnings of Run-off were $16 million, down 78.9% year over year, reflecting lower net investment income and a lower underwriting margin.
Adjusted operating loss at Corporate & Other was $59 million, which was narrower than the prior-year loss of $69 million due to higher net investment income and lower expenses, partially offset by a lower tax benefit.
Financial Update
Cash and cash equivalents were $4.1 billion, down 8.3% from 2021 end. Shareholders’ equity of $12.8 billion at the end of the quarter decreased 20.6% from 2021 end.
Book value per share, excluding accumulated other comprehensive income (AOCI), was $141.85 as of Mar 31, 2022, up 20% year over year. As of Mar 31, 2022, the estimated combined RBC ratio was between 450% and 470%.
Share Buyback Program
Brighthouse bought back shares worth $127 million in the quarter under review with another $53 million through May 5.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Brighthouse Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Brighthouse Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Brighthouse Financial is part of the Zacks Insurance - Life Insurance industry. Over the past month, China Life , a stock from the same industry, has gained 10.9%. The company reported its results for the quarter ended March 2022 more than a month ago.
China Life reported revenues of $55.22 billion in the last reported quarter, representing a year-over-year change of +361.5%. EPS of $0.43 for the same period compares with $0.08 a year ago.
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Why Is Brighthouse Financial (BHF) Up 5.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Brighthouse Financial (BHF - Free Report) . Shares have added about 5.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brighthouse Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Brighthouse Q1 Earnings Beat, Revenues Decrease Y/Y
Brighthouse Financial Inc.'s first-quarter 2022 adjusted net income of $4.07 per share surpassed the Zacks Consensus Estimate by 15.3%. The bottom line decreased 16.2% year over year.
The reported quarter witnessed higher expenses, lower adjusted net investment income and lower premiums.
Behind the Headlines
Total operating revenues of $2.3 billion decreased 5.5% year over year due to lower universal life and investment-type product policy fees, net investment income as well as premiums. Premiums of $166 million decreased 9.8% year over year.
Adjusted net investment income was $1.1 billion in the quarter under review, down 2.9% year over year, due to lower alternative investment income, partially offset by asset growth. The investment income yield was 4.36%.
Total expenses increased 13.3% year over year to $1.9 billion due to an increase in policyholder benefits and claims and amortization of DAC and VOBA. Corporate expenses were $208 million.
Quarterly Segmental Update
Annuities reported an adjusted operating income of $311 million, down 7.4% year over year, reflecting higher reserves, lower fees and higher deferred acquisition costs ("DAC") amortization, partially offset by lower expenses. Annuity sales decreased 3% to $2.1 billion.
Life generated an adjusted operating income of $26 million, down 38.1% year over year due to lower net investment income and underwriting margin, partially offset by lower expenses. Life insurance sales decreased 13% to $20 million.
Adjusted operating earnings of Run-off were $16 million, down 78.9% year over year, reflecting lower net investment income and a lower underwriting margin.
Adjusted operating loss at Corporate & Other was $59 million, which was narrower than the prior-year loss of $69 million due to higher net investment income and lower expenses, partially offset by a lower tax benefit.
Financial Update
Cash and cash equivalents were $4.1 billion, down 8.3% from 2021 end.
Shareholders’ equity of $12.8 billion at the end of the quarter decreased 20.6% from 2021 end.
Book value per share, excluding accumulated other comprehensive income (AOCI), was $141.85 as of Mar 31, 2022, up 20% year over year. As of Mar 31, 2022, the estimated combined RBC ratio was between 450% and 470%.
Share Buyback Program
Brighthouse bought back shares worth $127 million in the quarter under review with another $53 million through May 5.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Brighthouse Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Brighthouse Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Brighthouse Financial is part of the Zacks Insurance - Life Insurance industry. Over the past month, China Life , a stock from the same industry, has gained 10.9%. The company reported its results for the quarter ended March 2022 more than a month ago.
China Life reported revenues of $55.22 billion in the last reported quarter, representing a year-over-year change of +361.5%. EPS of $0.43 for the same period compares with $0.08 a year ago.