How did BHFAP's Q4 2024 earnings surprise impact its annual performance?

Brighthouse Financial Inc.'s (BHF) fourth-quarter (Q4) 2024 earnings surprise had a significant impact on its annual performance, as evidenced by the following key points:

1. **Earnings Surprise**: BHF reported an earnings surprise in Q4 2024, with adjusted earnings of $346 million, surpassing analysts' expectations. This positive surprise was a result of strong annuity sales, particularly in Shield annuities, which saw a 23% increase year-over-year.
2. **Impact on Annual Performance**:
- **Revenue Growth**: BHF's total revenue for the year ended December 31, 2024, was $5.4 billion. This represents a solid growth trajectory, underpinning the company's financial health and operational effectiveness.
- **Profitability**: The company's normalized statutory loss for Q4 2024 was approximately $600 million. However, the annual adjusted earnings were robust at $1.38 billion, or $5.57 per share. This indicates that while there were quarterly fluctuations, the annual profitability was strong.
- **Capital Position**: BHF's Statutory Combined Total Adjusted Capital stood at $5.4 billion as of June 30, 2024, down from $6 billion as of March 31, 2024. This decline was partly offset by the company's capital-raising activities, including common stock repurchases amounting to $151 million year-to-date.
- **Business Segment Performance**: The Annuities Segment contributed significantly, with adjusted earnings of $332 million in Q4 2024. Shield annuities, in particular, performed exceptionally, with sales exceeding $2 billion in Q4 and totaling $3.9 billion year-to-date, a 23% increase over the same period in 2023.
- **Strategic Initiatives**: BHF has been actively pursuing strategic initiatives to improve capital efficiency and unlock capital, aiming to return the Risk-Based Capital (RBC) ratio to the target range of 400% to 450%. The company is in the final stages of a reinsurance agreement expected to enhance the RBC ratio, with completion anticipated before year-end.

In conclusion, BHF's Q4 2024 earnings surprise had a positive ripple effect on its annual performance, bolstering revenue growth, profitability, and capital strength. The company's strategic focus on improving capital efficiency and unlocking capital is expected to further enhance its financial position and market competitiveness in the coming year.