Brighthouse Financial Q1 Earnings Miss Estimates on Higher Expenses

Brighthouse Financial, Inc. BHF reported first-quarter 2025 adjusted net income of $4.17 per share, which missed the Zacks Consensus Estimate by 11.6%. The bottom line declined 1.8% year over year.

The results reflected lower premiums and escalating expenses, offset by improved adjusted net investment income. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Behind the Headlines

Total operating revenues of $2.2 billion increased 6.1% year over year, driven by higher universal life and investment-type product policy fees and net investment income. 

Premiums of $186 million decreased 7.9% year over year. Our estimate was $218.3 million.

Adjusted net investment income was $1.3 billion in the quarter under review, up 2% year over year, primarily driven by asset growth. The investment income yield was 4.25%.

Brighthouse Financial, Inc. Price, Consensus and EPS Surprise

Brighthouse Financial, Inc. price-consensus-eps-surprise-chart | Brighthouse Financial, Inc. Quote

Total expenses were $2.7 billion, which increased nearly four-fold year over year. Our estimate was $995.5 million. Corporate expenses, pretax, were $239 million, up 15.4% year over year.

Quarterly Segmental Update of BHF

Annuities recorded an adjusted operating income of $314 million, up 0.3% year over year. Annuity sales decreased 21% year over year to $2.3 billion, primarily driven by lower sales of fixed annuities, partially offset by increased sales of Shield Level Annuities.

Life’s adjusted operating earnings were $9 million against a loss of $36 million in the year-ago reported quarter. It reflects a lower underwriting margin and higher expenses. Life insurance sales increased 24% quarter over quarter to $36 million, reflecting continued steady growth of the company's life insurance suite.

Adjusted operating loss at Run-off was $64 million, wider than the year-ago loss of $34 million. It reflects lower net investment income, partially offset by a higher underwriting margin.

Corporate & Other incurred an adjusted operating loss of $24 million, narrower than the year-ago loss of $34 million, reflecting lower tax.

Financial Update of BHF

Cash and cash equivalents were $4.7 billion, up 22% year over year.

Shareholders’ equity of $5.2 billion at the end of first-quarter 2025 increased 25% year over year.

Book value per share, excluding accumulated other comprehensive income, was $141.87 as of March 31, 2025, up 12.3% year over year.

Statutory combined total adjusted capital was $5.5 billion as of March 31, 2025, down 8.3% year over year.

As of March 31, 2025, the estimated combined risk-based capital ratio was 420-440%.

Brighthouse Financial’s Share Buyback Program

Brighthouse Financial bought back shares worth $59 million in the first quarter of 2025, with another $26 million on a trade date basis through May 6, 2025.

Zacks Rank

Brighthouse Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Reinsurance Group of America, Incorporated RGA reported first-quarter 2025 adjusted operating earnings of $5.66 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line decreased 6% from the year-ago quarter’s figure. Net foreign currency fluctuations had a favorable effect of 9 cents per share on adjusted operating income. 

RGA's operating revenues of $5.3 billion missed the Zacks Consensus Estimate by 7%. The top line declined 13.7% year over year due to higher net premiums and net investment income. Net premiums of $4 billion rose 23.9% year over year. Investment income increased 13% from the prior-year quarter to $1.2 billion on higher average invested assets. Average investment yield decreased to 4.64% from 4.7% in the year-ago period, reflecting lower variable investment income and lower yield on cash and cash equivalents, partially offset by higher new money rates.

Voya Financial, Inc. VOYA reported first-quarter 2025 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 35.2%. The bottom line increased 14.4% year over year.Total revenues amounted to nearly $2 billion, which decreased 4% year over year.

Net investment income increased 5.9% year over year to $560 million. Meanwhile, fee income of $570 million increased 11.1% year over year.  Premiums totaled $737 million, down 7.9% from the year-ago quarter. Total benefits and expenses were $1.8 billion, up 1.8% from the year-ago quarter. As of March 31, 2025, VOYA’s total client assets were $694 billion, up 21% year over year, primarily due to assets onboarded from OneAmerica, positive capital markets and significant recordkeeping wins.

Manulife Financial Corporation MFC delivered first-quarter 2025 core earnings of 69 cents per share, which missed the Zacks Consensus Estimate by 1.4%. The bottom line decreased 1.4% year over year. Core earnings of $1.2 billion (C$1.8 billion) declined 7.6% year over year. Core earnings decreased modestly, as continued business growth in Global WAM and Asia was offset by strengthened provisions related to expected credit loss of $45 million post-tax in the first quarter of 2025, and a provision for the California wildfires of $43 million post-tax in the first quarter of 2025.

New business value in the reported quarter was $631.6 million (C$907 million), up 29.4% year over year. Annualized premium equivalent sales increased 28.5% year over year to $1.8 billion (C$2.7 billion). New business contractual service margin increased 31.4% year over year to $631 million (C$907 million). The Global Wealth and Asset Management business generated net inflows of $0.3 billion (C$0.5 billion), which plunged 93.8% year over year.

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This article originally published on Zacks Investment Research (zacks.com).

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