Brighthouse Financial Q2 Earnings: Annuity Sales Soar, Life and Run-off Segments Disappoint

Brighthouse Financial reported Q2 EPS of $3.43, a 38.4% drop from last year, and a 21.7% miss on analyst estimates. GAAP revenue exceeded forecasts by 18.1%, reaching $2.6 billion. Annuity sales totaled $2.61 billion, up 8% QoQ and 16% sequentially. The Life segment swung to an adjusted loss of $26 million, while the Run-off segment saw adjusted earnings decline to $64 million from $74 million last year.

Brighthouse Financial (BHF) reported its second-quarter 2025 earnings on August 7, 2025, revealing a significant decline in earnings per share (EPS) and a substantial revenue drop. The company's non-GAAP EPS for the quarter was $3.43, a 38.4% year-over-year (YoY) decrease from $5.57 in the prior year, and missed analysts' expectations by 21.7% [2]. GAAP revenue reached $2.6 billion, surpassing the estimate of $2.2 billion.

Despite the earnings miss, GAAP revenue exceeded expectations by 18.1%, driven mainly by strong annuity sales. The annuities segment reported adjusted earnings of $332 million, consistent with the prior year. However, the Life and Run-off segments suffered from adjusted losses, signaling deeper profitability concerns. The Life segment swung to an adjusted loss of $26 million from adjusted earnings of $42 million in Q2 2024, while the Run-off segment recorded an even deeper adjusted loss at $83 million, compared to a $30 million adjusted loss in Q2 2024 [2].

The company's risk-based capital ratio remained healthy at 405–425%, supported by liquid assets totaling $0.9 billion. Brighthouse Financial also continued to return cash to shareholders, repurchasing $43 million of stock and $102 million year to date.

Wall Street analysts have set a range of one-year price targets for Brighthouse Financial Inc (BHF), with an average target of $58.63. These projections span from a high of $72.00 to a low of $42.00. The current consensus recommendation from 10 brokerage firms for BHF is an average rating of 2.9, signifying a "Hold" position. According to GuruFocus estimates, BHF's GF Value in one year is projected at $115.53, suggesting a remarkable upside potential of 150.77% from the current stock price of $46.07 [1].

Brighthouse Financial's business centers on insurance and annuity products, with a focus on independent distribution partners. The company aims to manage the complex risks in its annuity guarantees and simplify hedging approaches. Management remains focused on expense control, capital ratio management, and continued improvements in hedging strategy for legacy and current annuity blocks.

Investors should watch segment trends, especially the Life and Run-off business segments, as well as progress on hedging simplifications and any improvements in alternative investment returns, which have been below long-term targets. Monitor annuity sales, especially indexed products like Shield Level Annuities, and any shifts in investment return assumptions that could further affect net investment income and overall profitability.

References:
[1] https://www.gurufocus.com/news/3046897/brighthouse-financial-bhf-reports-q2-eps-miss-with-substantial-revenue-drop
[2] https://www.nasdaq.com/articles/brighthouse-bhf-q2-eps-drops-38