Manulife Financial Corp. (MFC), Canada’s largest insurer, said first-quarter profit dropped 56 percent on charges related to equity markets and interest rates, and as insurance sales in Asia and Canada declined.
Net income fell to C$540 million ($535.8 million), or 28 cents a share, from C$1.23 billion, or 63 cents, a year earlier, the Toronto-based firm said today in a statement. The insurer was expected to earn 27 cents a share, based on the average estimate of 11 analysts surveyed by Bloomberg.
Manulife, owner of Boston-based John Hancock Financial, said it had a 23 percent decline in total insurance sales compared with a year earlier. Among its competitors, Manulife is the most affected by changes in equity markets and the least linked to fluctuations in interest rates, Canadian Imperial Bank of Commerce analysts including Robert Sedran said in an April 15 note. The company had record wealth sales of C$12.4 billion, up 43 percent from last year, and record funds under management of C$555 billion.
“While insurance sales fell short of our expectations in the first quarter, due to our taking a leadership role in pricing to reflect lower interest rates, we also generated record wealth sales,” Chief Executive Officer Donald Guloien, 56, said in the statement.
Manulife fell 0.9 percent to close yesterday at C$14.76 in Toronto. The shares have gained 9.3 percent this year, outpacing the 2.8 percent advance of the 44-company S&P/TSX Financials Index.
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