Manulife Financial's Profit Climbs 45%
May 05 2016 - 8:20AM
Dow Jones News
Manulife Financial Corp., Canada's largest insurance company by
assets, posted a first-quarter profit on Thursday that was up 45%
from a year ago as interest-rate movements blunted the impact of
lower energy prices.
Toronto-based Manulife said its net earnings rose to 1.05
billion Canadian dollars ($816 million), or 51 Canadian cents a
share, for the January-to-March quarter. A year earlier, it had a
net profit of C$723 million, or 36 Canadian cents a share.
The company's bottom line benefited from higher fixed-income
rates and realized gains on the sale of available-for-sale bonds,
the company said in a release.
Core earnings, which exclude one-time items, rose to 44 Canadian
cents a share from 39 Canadian cents a year earlier. Analysts
polled by Thomson Reuters had expected a profit of 43 Canadian
cents a share for the quarter.
"This was a strong quarter, by almost any measure," Chief
Executive Donald Guloien said in a release, noting core earnings
were up 14% even without any contribution from investment gains in
the latest period.
Net earnings got a lift from a variety of market-related gains,
which more than offset depressed oil and gas prices, "serving as a
useful reminder that markets will fluctuate both in our favor and
against us," Mr. Guloien added.
In recent quarters, lower energy prices have diminished the
value of the company's oil and gas investments, pinching
profits.
The company left its quarterly dividend unchanged at 18.5
Canadian cents a share.
Manulife said overall insurance sales climbed 14% to C$954
million, with sales in Asia up 36%. Insurance sales dropped 28% in
Canada and edged up 4% in the U.S.
The insurer's minimum continuing capital and surplus
requirements ratio, a key measure of capital strength, stood at
233% at the end of March.
Manulife was scheduled to hold its annual meeting of
shareholders in Toronto later in the day.
In February, executives warned investors Manulife could miss a
long-held financial target for 2016 because lower commodity prices
were eroding the value of its energy investments.
At that time, Mr. Guloien cautioned it would be difficult for
Manulife to achieve its target of C$4 billion in core earnings this
year—a goal it set back in 2012. Executives had previously
cautioned the company may not realize its goal of generating 13%
core return on equity in 2016.
Manulife is the first of Canada's major insurers to report
first-quarter results. Smaller rival Sun Life Financial Inc. is
expected to report results and hold its annual meeting on May
11.
Write to Rita Trichur at rita.trichur@wsj.com.
(END) Dow Jones Newswires
May 05, 2016 08:05 ET (12:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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