Market Overview

Brighthouse Financial Announces Third Quarter 2019 Results

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  • Third quarter 2019 net income available to shareholders of $676 million, or $6.06 per diluted share, driven primarily by net derivative mark-to-market gains
  • Adjusted earnings, less notable items*, of $260 million, or $2.33 per diluted share
  • Annuity sales grew 17 percent over the third quarter of 2018
  • Variable annuity assets of approximately $1.5 billion in excess of CTE98*
  • Company repurchased approximately $126 million of its common stock during the quarter

Brighthouse Financial, Inc. ("Brighthouse Financial" or the "company") (NASDAQ:BHF) announced today its financial results for the third quarter ended September 30, 2019.

Third Quarter 2019 Results

The company reported net income available to shareholders of $676 million in the third quarter of 2019, or $6.06 per diluted share, compared with a net loss available to shareholders of $271 million in the third quarter of 2018. The company ended the third quarter of 2019 with common stockholders' equity ("book value") of $17.3 billion, or $158.18 per common share, and book value, excluding accumulated other comprehensive income ("AOCI") of $13.7 billion, or $125.53 per common share.

For the third quarter of 2019, the company reported an adjusted loss* of $169 million, or $1.52 per common share.

The adjusted loss for the quarter reflected $429 million after tax of net unfavorable notable items, or $3.85 per common share, including:

  • $442 million unfavorable impact related to the annual actuarial review completed in the third quarter. In addition to other updates, the company lowered its long-term mean reversion interest rate assumption from 4.25% to 3.75%, with no change to the 10-year mean reversion period.
  • $23 million tax benefit due to a revaluation of tax items related to the company's separation from its former parent company.
  • $10 million unfavorable impact as a result of establishment costs related to planned technology and branding expenses associated with the company's separation from its former parent company.
____________________

*

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 are 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 Third Quarter 2019 Brighthouse Financial, Inc. Financial Supplement and/or the Third 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.

Corporate expenses in the third quarter of 2019 were $248 million pre-tax, up from $242 million pre-tax in the second quarter of 2019.

Annuity sales increased 17 percent quarter-over-quarter and decreased 4 percent sequentially.

During the third quarter of 2019, the company repurchased approximately $126 million of its common stock, with an additional $49 million of its common stock repurchased in October 2019. Since the announcement of the company's first stock repurchase authorization in August 2018, the company has repurchased a total of $468 million of its common stock through October 2019.

"We delivered solid results during the third quarter of 2019 as we continued to execute our strategy," said Eric Steigerwalt, president and CEO, Brighthouse Financial. "Our sales remained strong, our hedging program continued to perform well, and we repurchased more of our common stock. Going forward, we remain confident in our strategy, which we believe will enable us to generate long-term value for our shareholders, our distribution partners, and the clients they serve."

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

 

 

As of or For the Three Months Ended

 

 

September 30, 2019

 

September 30, 2018

 

 

Total

 

Per share

 

Total

 

Per share

Net income (loss) available to shareholders (1)

 

$676

 

$6.06

 

$(271)

 

$(2.26)

Adjusted earnings (1), (2)

 

$(169)

 

$(1.52)

 

$270

 

$2.23

Adjusted earnings, less notable items (1)

 

$260

 

$2.33

 

$314

 

$2.60

Weighted average common shares outstanding - diluted

 

111,527,480

 

N/A

 

120,641,572

 

N/A

 

 

 

 

 

 

 

 

 

Book value

 

$17,283

 

$158.18

 

$12,884

 

$108.45

Book value, excluding AOCI

 

$13,716

 

$125.53

 

$12,332

 

$103.80

Ending common shares outstanding

 

109,264,305

 

N/A

 

118,800,611

 

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.

(2) The company uses the term "adjusted loss" throughout this news release to refer to negative adjusted earnings values.

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

 

 

For the Three Months Ended

ADJUSTED EARNINGS

 

September 30,

2019

 

June 30,

2019

 

September 30,

2018

Annuities

 

$203

 

$265

 

$401

Life

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