Manulife Financial's Profit Climbs 45%

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 [e-mail].

(END) Dow Jones Newswires

May 05, 2016 08:05 ET (12:05 GMT)

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