Sun Life profit beats, while Industrial Alliance sags
By Cameron French
TORONTO (Reuters) - Strong markets pushed Sun Life Financial Inc SLF.TO profit up 56 percent in the first quarter, topping analysts' estimates and driving Sun Life shares higher, while smaller rival Industrial Alliance (IAG.TO: Quote) sold off after disappointing results.
Sun Life, Canada's No. 3 insurer, earned C$1.22 per share on a operating basis, well ahead of analysts' expectations of a profit of 75 Canadian cents.
Stripping out a C$348 million gain from higher stock markets and bond yields, core results were in line with expectations.
"The core numbers, which would remove market-related gains or losses, were pretty much in line, a little better than we had," said Peter Routledge, an analyst at National Bank of Canada.
The stock rose 1.9 percent to C$22.55, the strongest Canadian financial performer of the day.
Sun Life reported consecutive losses during the third and fourth quarters of 2011 as markets weakened, forcing it and its Canadian rivals to bulk up reserves to ensure expected returns from their stock and bond portfolios match policy obligations.
The S&P/TSX composite index .GSPTSE rose 3.7 percent in the first quarter, while U.S. 10-year treasuries, which are used as a benchmark by the industry, rose more than 30 basis points. Continued...