Manulife Posts C$1 Billion Profit on Wealth, Insurance Sales

Nov. 7 (Bloomberg) -- Manulife Financial Corp., Canada’s largest life insurer by market value, posted third-quarter profit that beat analysts’ estimates on higher sales of insurance and savings products.

Net income was C$1.03 billion ($993 million), or 54 cents a share, compared with a restated loss of C$211 million, or 13 cents, a year earlier, the Toronto-based firm said today in a statement. Profit excluding some items was 36 cents a share, topping the 35-cent average estimate of 12 analysts surveyed by Bloomberg.

“Insurance sales increased modestly, but most importantly, were accompanied by much higher margins,” Chief Executive Officer Donald Guloien, 56, said in the statement. “Wealth sales were extremely positive across the board. The overall plan is unfolding extremely well.”

Wealth product sales increased 34 percent to C$11.3 billion from a year earlier, with the company’s funds under management reaching a record C$575 billion, according to the statement. Insurance sales climbed 4 percent.

“Overall, this looks like a solid result,” Robert Sedran, an analyst at Canadian Imperial Bank of Commerce in Toronto, said today in a note to clients.

Asia insurance sales were “disappointing,” dropping 4 percent to $251 million from a year earlier on a decline in Japan, according to the statement. Revenue from wealth products in Asia rose 21 percent to $1.3 billion over last year, as sales of the company’s income fund in Japan gained and its Hong Kong business added pension business.

Wealth Sales

“We’re very happy with our wealth sales, they were very strong in most regions,” Chief Financial Officer Steve Roder said in a phone interview after the results were released. “But we have some great ambitions for our wealth business, so I wouldn’t say it was a huge surprise for us.”

The insurer relied on its wealth operations for about 35 percent of profit last year and that will reach 40 percent by 2016 as the business is expanded, Roder said.

Manulife gained 3.3 percent to C$19.32 in Toronto at 10:02 a.m., the highest since February 2011. It has rallied 43 percent this year, outpacing the 37 percent advance of the six-company Standard & Poor’s/TSX Life & Health Insurance Index.

Sun Life Financial Inc., Canada’s third-largest insurer, said yesterday that net income from continuing operations slipped 27 percent to C$324 million. Operating profit, which excludes some items, was 69 cents a share, beating the 64-cent average estimate of 11 analysts surveyed by Bloomberg. Wealth-management and insurance sales rose.

(Manulife is hosting an investor conference call at 2 p.m. Toronto time at 416-340-8018 or 1-866-225-0198.)

To contact the reporter on this story: Katia Dmitrieva in Toronto at edmitrieva1@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net