(In 5th paragraph, corrects Q3 2011 markets loss)
* Net loss EPS C$0.14 vs est C$0.31
* Stronger markets drive improvement
* Company takes C$1 bln charge, pushes back profit target
By Cameron French
Nov 8 Manulife Financial Corp has
pushed out its profit goal of C$4 billion by a year to 2016,
citing macro-economic conditions, although its quarterly loss
narrowed due to stronger financial markets-related results
during the quarter.
The improved markets performance helped to offset a C$1
billion charge related to a shift in actuarial assumptions,
Canada's largest life insurer said on Thursday.
Manulife's net loss of C$227 million ($228 million), or 14
Canadian cents per share, in the three months ended Sept. 30,
compared with a year-earlier loss of C$1.28 billion, or 73
Canadian cents per share.
The result topped analysts' estimates for a net loss of 31
Canadian cents per share.
The company took an C$88 million loss due to equity market
and interest rate movements during the quarter, but that
compared to a much larger C$889 million markets-related loss in
the year-earlier quarter.
Volatile markets have led to sharp variances in the
company's quarter-to-quarter results since the 2008 financial
"It was pretty much an in-line quarter, which is unusual.
Usually something comes out of the blue that changes my view of
the company. That didn't happen," said Peter Routledge, an
analyst at national Bank Financial.
Toronto-based Manulife, which owns U.S. insurer John
Hancock, warned in August it would take the C$1 billion charge
due to its annual review of actuarial assumptions. That charge
relates to the current macro-economic climate on some of
Manulife's insurance and annuity products.
Manulife also took a goodwill impairment charge of C$200
The company also warned in August it would revisit its 2015
target of C$4 billion in net earnings, due largely to the fact
that bond yields have remained stubbornly low, which changes the
way the insurer calculates its ability to meet future policy
The new target pushes that goal back a year and ties it to
core earnings, which will exclude the direct impact of markets.
Despite the myriad charges, Routledge said investors might
take a favorable view overall to the results.
"Manulife's priced a little bit below where its peers are so
there could be some upward movement in the stock," he said.
Total premiums and deposits for the company's wealth
businesses rose 10 percent to exceed C$11 billion, driven by
growth in most of Asia and also in the North American mutual
fund and retirement businesses.
The result follows a stronger-than-expected profit by rival
Sun Life Financial late on Wednesday.
Sun Life, Canada's No. 3 insurer, said it swung back to a
third-quarter profit from a year-before loss due to stronger
markets. It earned a core profit of 68 Canadian cents a share,
ahead of analysts' estimates of 63 Canadian cents a share.
($1 = 0.9958 Canadian dollars)
(Additional reporting by Ashutosh Pandey in Bangalore)