Brighthouse Financial Inc. BHF reported fourth-quarter 2023 adjusted net income of $2.92 per share, which missed the Zacks Consensus Estimate by 23.8%. The bottom line declined 16.8% year over year.

The results reflected higher revenues offset by higher expenses.

Behind the Headlines

Total operating revenues of $2.1 billion increased 5.4% year over year, driven by higher premiums, net investment income and other income. The top line beat the consensus mark by 0.2%.

Premiums of $226 million increased 35.5% year over year.

Adjusted net investment income was $1.2 billion in the quarter under review, up 13.3% year over year, primarily driven by alternative investment income, asset growth and higher interest rates. The investment income yield was 4.16%.

Total expenses were $2.6 million. Corporate expenses, pretax, were $224 million, a slight increase from $243 million incurred in the year ago quarter.

Brighthouse Financial, Inc. Price, Consensus and EPS Surprise

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

Quarterly Segmental Update

Annuities recorded an adjusted operating income of $245 million, up 26.3% year over year, attributable to lower fees, higher expenses and a lower underwriting margin. Annuity sales decreased 8% to $2.7 billion, attributable to lower fixed deferred annuity sales, partially offset by strong Shield Annuity sales.

Life’s adjusted operating income was $4 million, down 76.5% year over year. The year-over-year deterioration was due to a lower underwriting margin, partially offset by higher net investment income and lower expenses. Life insurance sales increased 28% to $29 million.

Adjusted operating loss at Run-off was $50 million against the year-ago income of $236 million, reflecting lower underwriting margin, partially offset by higher net investment income.

Corporate & Other incurred an adjusted operating loss of $22 million against the year-ago income of $98 million, reflecting lower tax benefits and higher expenses.

Financial Update

Cash and cash equivalents were $3.8 billion, down 6.4% year over year.

Shareholders’ equity of $4.9 billion at the end of 2023 decreased 10.7% year over year.

Book value per share, excluding accumulated other comprehensive income, was $133.69 as of Dec 31, 2023, down 8.2% year over year.

Statutory combined total adjusted capital was $6.3 billion as of Dec 31, 2023, down 22.2% year over year.

As of Dec 31, 2023, the estimated combined risk-based capital ratio was 420%.

Share Buyback Program

Brighthouse bought back shares worth $250 million in 2023, with another $30 million through Feb 9, 2024. The company has about $763 million remaining under its current share repurchase authorizations.