Manulife profit tops estimates, hires CFO

Thu May 3, 2012 11:30am EDT
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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 has hired a new chief financial officer to replace 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.

However, some analysts said the core results - when looking past the impact of markets and other items - were merely in line with, or slightly below expectations.

"The headline earnings may garner some support... However, we believe that (the stock's) upside is likely limited by a notional miss against consensus," Barclays Capital analyst John Aiken said in note.

Manulife's shares were up 1 percent, or 13 Canadian cents, at C$13.47 at mid morning on Thursday.

The company said it could take a charge of C$700 million-C$800 million in the second quarter to reflect the impact of lower bond yields on the company's long-term investment expectations, a higher charge than some had expected.

"We were at C$550 million heading into the quarter, so they're going to take a bigger charge than we thought," said Peter Routledge, an analyst at National Bank Financial.   Continued...