Manulife Financial reports $609 million of core earnings in second quarter

TORONTO – Manulife Financial Corp. (TSX:MFC) is reporting a $259 million profit in its latest quarter, coming in below expectations as one-time charges related to market conditions and investment losses took their toll on its earnings.

The Canadian insurance and wealth management company said the profit amounted to 12 cents per diluted share compared with a loss of $281 million or 17 cents per share a year earlier.

Manulife reported what it called core earnings, which strip out a number of one-time charges, of $609 million or 31 cents per share, up from $599 million or 30 cents per share a year ago.

Both the net income and core earnings fell short of analyst estimates.

Analysts had been looking 34 cents per share of core earnings and 28 cents per share of net income, according to estimates compiled by Thomson Reuters.

“Our second quarter net income is not as strong as we would have liked, due to the impact of a number of market-related items,” president and chief executive Donald Guloien said in a statement.

“Having said that, it is a significant improvement over the prior year, volatility is being constrained, core earnings are strong, and our outlook is positive.”

Shares in Manulife have gained roughly a third from the start of the year, outpacing the S&P/TSX composite index which is about where it started the calendar.

The insurance companies have been hit hard in recent years, hit by low interest rates and volatile stock markets.

However, interest rates appear headed higher, a move that will benefit insurance companies who invest much of their money to be able to pay policyholders.

Manulife is one of Canada’s largest insurance companies with operations in Canada, the United States and Asia.

Last month, the company announced its subsidiary, Manulife (International) Ltd. agreed to sell its life insurance business in Taiwan to CTBC Life Insurance Co., Ltd., a subsidiary of CTBC Financial Holding Co., Ltd.

The company’s John Hancock Financial also signed a deal in June to acquire Symetra Investment Services from Symetra Financial Corp. for an undisclosed price.