Market Overview

Brighthouse Financial Announces First Quarter 2019 Results

Share:
  • First quarter 2019 net loss available to shareholders of $737
    million, or $6.31 on a per diluted share basis, driven primarily by
    net derivative mark-to-market losses
  • Adjusted earnings, less notable items*, of $259 million, or $2.21
    on a per diluted share basis
  • Annuity sales grew 36 percent over the first quarter of 2018
  • Variable annuity assets approximately $1.1 billion in excess of
    CTE98*
  • Company repurchased $52 million of its common stock during the
    quarter; announced the repurchase of up to an additional $400 million
    shares of common stock

Brighthouse Financial, Inc. ("Brighthouse Financial" or the "company")
(NASDAQ:BHF) announced today its financial results for the first
quarter ended March 31, 2019.

First Quarter 2019 Results

The company reported a net loss available to shareholders of $737
million in the first quarter of 2019, or $6.31 on a per diluted share
basis, compared to a net loss available to shareholders of $67 million
in the first quarter of 2018. The company ended the first quarter of
2019 with stockholders' equity ("book value") of $15.0 billion, or
$129.10 on a per share basis, and book value, excluding preferred stock
and accumulated other comprehensive income ("AOCI") of $12.9 billion, or
$111.18 on a per share basis.

For the first quarter of 2019, the company reported adjusted earnings*
of $232 million, or $1.98 on a per diluted share basis.

The adjusted earnings for the quarter reflected a $27 million
unfavorable notable item, or $0.23 on a per diluted share basis, for
establishment costs related to planned technology and branding expenses
associated with the company's separation from its former parent company.

Corporate expenses in the first quarter of 2019 were $225 million
pre-tax, down from $233 million pre-tax in the fourth quarter of 2018.

_______________________

*

Information regarding the non-GAAP and other financial measures
included in this news release and a reconciliation of such
non-GAAP financial measures to the most directly comparable GAAP
measures is provided in the Non-GAAP and Other Financial
Disclosures discussion below, as well as in the tables that
accompany this news release and/or the First Quarter 2019
Brighthouse Financial, Inc. Financial Supplement and/or the First
Quarter 2019 Brighthouse Financial, Inc. Earnings Call
Presentation (which are available on the Brighthouse Financial
Investor Relations web page at http://investor.brighthousefinancial.com).
Additional information regarding notable items can be found on the
last page of this news release.

 

Annuity sales increased 36 percent quarter-over-quarter and 1 percent
sequentially. The company's first quarter 2019 sales results were its
highest since becoming an independent public company.

The company also announced today that it has authorized the repurchase
of up to $400 million of Brighthouse Financial common stock. This stock
repurchase authorization is in addition to the $200 million stock
repurchase authorization announced in August 2018. During the first
quarter of 2019, the company repurchased $52 million of its common
stock, with an additional $14 million of its common stock repurchased in
April 2019, bringing total repurchases pursuant to the August 2018
authorization to $171 million through April 30, 2019.

"Brighthouse delivered solid results during the first quarter of 2019,
driven by robust annuity sales, favorable market conditions, and prudent
capital and expense management," said Eric Steigerwalt, president and
chief executive officer, Brighthouse Financial. "We remain focused on
executing our strategy, which we continue to believe will generate
long-term value for our customers, partners and shareholders."

Key Metrics (Unaudited, dollars in millions except share and per
share amounts)

  As of or For the Three Months Ended
March 31, 2019   March 31, 2018
Total   Per share Total   Per share
Net income (loss) available to shareholders (1) $(737) $(6.31) $(67) $(0.56)
Adjusted earnings (1) $232 $1.98 $283 $2.36
Weighted average common shares outstanding - diluted 117,229,854 N/A 119,773,106 N/A
 
Book value $14,999 $129.10 $13,584 $113.41
Book value, excluding preferred stock and AOCI $12,917 $111.18 $12,847 $107.26
Ending common shares outstanding 116,182,687 N/A 119,773,106 N/A
 
(1) Per share amounts are on a diluted basis and may not recalculate
due to rounding. For loss periods, dilutive shares were not included
in the calculation as inclusion of such shares would have an
anti-dilutive effect.
 

Results by Business Segment and Corporate & Other (Unaudited, in
millions)

    For the Three Months Ended
Adjusted earnings March 31,
2019
  December 31,
2018
  March 31,
2018
Annuities $295 $175 $226
Life $25 $64 $66
Run-off (1) $(36) $18 $50
Corporate & Other (1) $(52) $(71) $(59)
 
(1) The company uses the term "adjusted loss" throughout this news
release to refer to negative adjusted earnings values.
 

Sales (Unaudited, in millions)

  For the Three Months Ended
March 31,
2019
  December 31,
2018
  March 31,
2018
Annuities (1) $1,707 $1,698 $1,256
Life $1 $1 $2
 
(1) Annuities sales include sales of a fixed indexed annuity product
sold by Massachusetts Mutual Life Insurance Company, representing
90% of gross sales of that product. Sales of this product were $281
million for the first quarter of 2019, $368 million for the fourth
quarter of 2018, and $173 million for the first quarter of 2018.
 

Annuities

Adjusted earnings in the Annuities segment were $295 million in the
current quarter, compared to adjusted earnings of $226 million in the
first quarter of 2018 and adjusted earnings of $175 million in the
fourth quarter of 2018.

There were no notable items in the current quarter or in the first
quarter of 2018. The fourth quarter of 2018 included a $12 million
favorable notable item.

On a quarter-over-quarter and sequential basis, adjusted earnings, less
notable items, reflect lower amortization of deferred acquisition costs
("DAC"), lower reserves, and higher net investment income, driven
primarily by positive market performance in the quarter, partially
offset by lower fees.

As mentioned above, annuity sales increased 36 percent
quarter-over-quarter and 1 percent sequentially.

Life

Adjusted earnings in the Life segment were $25 million in the current
quarter, compared to adjusted earnings of $66 million in the first
quarter of 2018 and adjusted earnings of $64 million in the fourth
quarter of 2018.

There were no notable items in the current quarter. The first quarter of
2018 included $16 million of favorable notable items, while the fourth
quarter of 2018 did not include any notable items.

On a quarter-over-quarter basis, adjusted earnings, less notable items,
reflect higher claims and lower net investment income, partially offset
by lower expenses. On a sequential basis, adjusted earnings, less
notable items, reflect higher claims related to lower reinsurance
recoveries, and lower net investment income, partially offset by lower
DAC amortization.

Run-off

The Run-off segment had an adjusted loss of $36 million in the current
quarter, compared to adjusted earnings of $50 million in the first
quarter of 2018 and adjusted earnings of $18 million in the fourth
quarter of 2018.

There were no notable items in the current quarter while the first
quarter of 2018 included $16 million of favorable notable items. The
fourth quarter of 2018 included $14 million of favorable notable items.

On a quarter-over-quarter basis, the adjusted loss, less notable items,
reflects lower net investment income and higher claims related to lower
reinsurance recoveries. On a sequential basis, the adjusted loss, less
notable items, reflects lower net investment income.

Corporate & Other

Corporate & Other had an adjusted loss of $52 million in the current
quarter, compared to an adjusted loss of $59 million in the first
quarter of 2018 and an adjusted loss of $71 million in the fourth

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