Brighthouse Financial Shares Drop 14% on Unexpected Swing to 4Q Loss
Brighthouse Financial, a leading life-insurance company, faced significant losses in the fourth quarter, causing its shares to plummet 14% on Tuesday. The surprising news left analysts and investors stunned, as they had forecasted positive earnings for the period.
The company reported a loss of $917 million, equating to $14.70 per share, compared to the previous year’s profit of $136 million, or $1.59 per share. Adjusted figures showed per-share earnings of $2.73 for the fourth quarter, falling short of analysts’ expectations of $2.86, according to a poll by FactSet.
The unexpected swing to a loss can be attributed to the decrease in the value of Brighthouse Financial’s hedges, due to market performance. The company stated that this decline was anticipated, as it implemented new statutory measures which require all future hedges to be accounted for in reserves and required capital.
As a consequence of these disappointing results, Brighthouse Financial’s shares tumbled to $45.93 as of 11:47 a.m. ET on Tuesday. Investors and analysts are now closely observing the company’s future actions and market performance to gauge its recovery from this setback.
Analyst comment
Negative news. Brighthouse Financial’s unexpected swing to a loss in the fourth quarter led to a 14% drop in shares. The company reported a loss of $917 million, compared to previous year’s profit of $136 million. The decrease in the value of hedges and lower-than-expected per-share earnings contributed to the poor performance. Market will closely watch the company’s actions and performance to assess its recovery.
