Manulife, Sun Life profits surpass estimates

TORONTO Shares of Manulife Financial Corp. and Sun Life Financial Inc. jumped Thursday as the two Canadian insurers posted third-quarter profits that topped analysts’ expectations, as gains in Asia fuelled earnings growth.

Sun Life saw underlying profit in Asia surge 25 per cent to $138 million, boosted by higher sales in insurance and wealth, while Manulife’s record $520 million of core earnings for the region was up 13 per cent from a year earlier.

“The rebound in Asia was stronger than expected” for Sun Life, Sumit Malhotra, an analyst at Bank of Nova Scotia, said in a note to clients.

For Manulife “Asia once again carried the freight for earnings power,” Malhotra said.

Shares of Manulife, Canada’s largest life insurer, rose 2.6 per cent to $26.12 at 9:47 a.m. in Toronto, its biggest intraday increase since Oct. 11. Sun Life advanced 1.5 per cent to $61.55.

Sun Life’s underlying net income rose 11 per cent to $809 million in the quarter, with pershare earnings of $1.37 topping the $1.27-a-share average estimate of 12 analysts surveyed by Bloomberg.

The Toronto-based insurer reported $78 million of tax-related benefits in the quarter.

Sun Life raised its dividend by five per cent to 55 cents a share.

Among Sun Life’s other key divisions, underlying earnings in Canada rose 6.8 per cent to $268 million while the U.S. division saw profit slide 2.9 per cent.

Its asset management division saw little change from a year earlier, at $251 million.

Manulife’s core earnings fell 0.8 per cent to $1.53 billion, or 76 cents a share, beating the 73-cent average estimate of 13 analysts in a Bloomberg survey.

Earnings in the U.S. rose 0.9 per cent to $471 million while the Canadian division had a 7.6-per-cent drop in profit to $318 million.

Wealth and asset management earnings fell 2.4 per cent to $281 million.

Bloomberg