Brighthouse Financial Inc (NASDAQ:BHF) reported financial results for the fourth quarter and full year 2025, delivering a mixed performance against analyst expectations. The company's key profitability metric fell short of forecasts, while its sales activity showed resilience. The market's immediate reaction appeared muted, with the stock showing minimal after-hours movement following the announcement.
Earnings and Revenue Versus Estimates
The insurer's fourth-quarter results presented a clear divergence between its underlying sales strength and its bottom-line profitability. The company reported adjusted earnings, excluding notable items, of $3.93 per share. This figure fell meaningfully short of the analyst consensus estimate of $5.27 per share. The shortfall was attributed to a $13 million unfavorable notable item related to actuarial refinements and broader pressures across several segments.
In contrast, the company's top-line sales metrics held up. Annuity sales for the quarter were $2.73 billion, representing a significant 22% increase compared to the fourth quarter of 2024. For the full year, annuity sales reached $10.3 billion, up 3% year-over-year. Life insurance sales also set a full-year record of $143 million, a 19% increase. The reported revenue figure of $2.17 billion for the quarter came in below the estimated $2.27 billion, though it is important to note that for insurance companies, sales of new policies and premium inflows are often more indicative of current business momentum than GAAP revenue, which is heavily influenced by accounting for the existing book of policies and investment performance.
Market Reaction and Price Action
The market's reaction to the earnings release was subdued. In after-hours trading, the stock showed no significant price movement. This neutral immediate reaction suggests the results may have been largely anticipated or that investors are primarily focused on the pending acquisition of the company by Aquarian Capital, a transaction valued at approximately $4.1 billion or $70.00 per share. Over recent weeks, the stock has seen modest declines:
- Last Week: -2.0%
- Last Two Weeks: -1.9%
- Last Month: -2.4%
This trend indicates a period of consolidation, likely as the market awaits the closure of the merger, which received shareholder approval in February 2026 and is pending regulatory approvals.
Key Takeaways from the Quarterly Report
Beyond the headline earnings miss, the press release highlighted several important financial and operational details:
- Segment Performance: The Annuities segment was the standout, generating $304 million in adjusted earnings, flat sequentially and up from $279 million year-over-year. The Life and Run-off segments saw earnings decline, while Corporate & Other reported a $50 million loss, partly due to costs associated with the pending acquisition.
- Capital and Liquidity: The company ended the quarter with a strong statutory capital position. The preliminary combined Risk-Based Capital (RBC) ratio was 456%, above the company's target range of 400% to 450%. Holding company liquid assets were $0.9 billion.
- Investment Income: Adjusted net investment income was $1.33 billion for the quarter, with a yield of 4.44%. This represents a decrease from the prior year, driven by a smaller institutional spread margin business and lower short-term interest rates.
- Pending Merger: The definitive agreement to be acquired by Aquarian Capital for $70.00 per share in cash remains the dominant corporate narrative, with the transaction expected to close in 2026 subject to regulatory approvals.
Looking Ahead
The company did not provide a specific financial outlook in its press release, as it is operating under a pending acquisition agreement. However, analyst estimates for the coming periods are available. For the first quarter of 2026, the consensus estimates project revenue of approximately $5.12 billion and sales of $2.34 billion. For the full year 2026, analysts are estimating revenue of $21.05 billion and sales of $9.14 billion. Investors will be watching for any updates on the merger timeline and the company's ability to maintain sales momentum during the interim period.
For a detailed breakdown of historical earnings, future estimates, and analyst projections, you can review more information on the BHF earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
