JXN

Jackson Financial is a leading US variable-annuity writer whose GAAP income statement is notoriously noisy — and FY2025 is a textbook case. Reported net income collapsed to $27.0M (diluted EPS -$0.24) from $946M in FY2024, while revenue swung +104% to $6.68B. These wild swings are not operating reality: they are driven by mark-to-market accounting on market risk benefits and embedded derivatives that hedge the annuity book. The 10-K's sensitivity tables show how a 100bp rate move or 10% equity move shifts the fair value of these benefits by billions, overwhelming the underlying spread/fee earnings in any single GAAP period. The five-year history (net income of $3.42B, $6.19B, $934M, $946M, $27M) underscores that GAAP EPS is the wrong lens here.

What matters for an annuity insurer is capital generation and balance-sheet strength, and on that basis Jackson looks attractive. Operating cash flow was a massive $5.76B, stockholders' equity grew to $9.95B, retained earnings stand at $7.47B, and cash rose 51% to $5.70B. The company is returning capital aggressively — $669M of buybacks (+51%, shrinking shares 2.7%) plus a $223M dividend (+5.7%) — a clear signal management views the shares as cheap. The very high liabilities/equity (34.39x) is normal for a life insurer where policyholder liabilities dominate the balance sheet.