Canada's Manulife profit tops estimates, hires CFO
By Cameron French
TORONTO (Reuters) - Manulife Financial (MFC.TO: Quote) profit unexpectedly rose 22 percent in the first quarter on market-related gains and insurance sales, and the company said it had hired a new chief financial officer to replace the soon-to-depart Michael Bell.
Canada's largest insurer earned C$1.2 billion ($1.21 billion), or 66 Canadian cents a share, in the quarter. Analysts had expected it to earn 36 Canadian cents a share, according to Thomson Reuters I/B/E/S.
The result marked a reversal from losses in the second half of 2011, and was up from the company's 2011 first-quarter profit of C$985 million, or 54 Canadian cents a share.
"It was a big beat, obviously," said National Bank Financial analyst Peter Routledge.
Still, the company said it could take a charge of C$700-C$800 million in the second quarter, to reflect the impact of lower bond yields on the company's long-term investment expectations.
Routledge had expected a charge, but not such a steep one.
"We were at C$550 million heading into the quarter, so they're going to take a bigger charge than we thought," he said.
Volatile stock and bond markets have led to wild swings in Canadian insurers' results over the past three years, as they must make regular reserve adjustments to reflect the impact of markets on their portfolios to cover future policy obligations. Continued...