Charlotte’s Brighthouse Financial reports quarterly loss after splitting from MetLife

Brighthouse Financial employees ring the Nasdaq opening bell August 7, 2017, in New York’s Times Square, on the Charlotte-based company’s first day of trading.
Brighthouse Financial employees ring the Nasdaq opening bell August 7, 2017, in New York’s Times Square, on the Charlotte-based company’s first day of trading.

Brighthouse Financial, the Charlotte-based insurer spun off this year by MetLife, reported a large loss Thursday in its first quarterly results as a standalone public company.

Brighthouse disclosed a net loss in the third quarter of $943 million, which it attributed partly to charges related to its Aug. 4 separation. Brighthouse said the $1.1 billion non-cash tax expense was triggered prior to the split from MetLife, which paid the charge. Excluding the tax expense, Brighthouse would have had a profit of $130 million, the firm’s chief financial officer said.

Charlotte-based Brighthouse CEO Eric Steigerwalt, former head of MetLife’s U.S. retail business, called the inaugural quarterly results a meaningful milestone for Brighthouse, whose headquarters are in Ballantyne.

Speaking on a conference call with analysts and others to discuss the results, Steigerwalt said he was very pleased with the new firm’s sales momentum. The company said its annuity sales increased 8 percent from a year ago. Life insurance sales slipped 82 percent.

In a move some analysts weren’t expecting, Steigerwalt announced the firm was lowering its target for operating return on equity, a measure of how effective a company is at using shareholder funds to generate profits.

Steigerwalt said the new target was about 8 percent on average over time. That’s down from a goal of approximately 9 percent outlined in securities filings before the spin-off. Steigerwalt attributed the adjustment partly to the fact that Brighthouse posted a profit in the second quarter, as well as the impact spin-off transactions had on shareholder equity.

Shares of Brighthouse fell more than 4 percent Thursday to $59.23 as major indices rose. The shares opened at $62.75 on Aug. 7, their first day of trading.

MetLife pledged to keep the separated company headquartered in Charlotte, which it picked to consolidate its U.S. retail operations in exchange for state and local incentives.

Brighthouse, whose products range from life insurance to annuities, said it employs about 1,200 nationwide, including in New York, Boston, Florida and New Jersey. About 750 of those are in Charlotte, the firm said.

In an Observer interview Aug. 7, Steigerwalt said Brighthouse plans to add employees in Charlotte as part of a plan to grow the new firm’s U.S. workforce by 200 to 300 people. The majority of the new hires will be in Charlotte, said Steigerwalt, who relocated from New Jersey to run the retail hub MetLife decided to open in Charlotte in 2013.

On Thursday, Steigerwalt said a priority has been to create a recognizable brand for the new company. He pointed to advertising efforts taken since the brand’s launch in March, including TV commercials that ran during the World Series and other shows. Initial feedback to the ads has been very favorable, he said.

“These campaigns have helped generate awareness in the market and have allowed us to hit the ground running as a new public company,” he said.

Deon Roberts: 704-358-5248, @DeonERoberts