Power Financial profit drops in line with expectations

Fri Aug 3, 2012 11:28am EDT
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(Reuters) - Canadian financial services company Power Financial (PWF.TO: Quote) said on Friday profit fell in the second quarter, in line with expectations, as mutual fund sales at its IGM Financial (IGM.TO: Quote) unit slumped, while its life insurance business stayed steady.

The Montreal-based company said it had operating earnings of C$448 million ($448 million), or 63 Canadian cents a share, down from C$507 million, or 72 Canadian cents a share, in the same quarter a year earlier.

Net income, which included a C$15 million income tax charge in 2012 related in part to IGM, fell to C$433 million, or 61 Canadian cents a share, from C$507 million, or 72 Canadian cents a share, a year earlier.

That was in line with market expectations for a per share profit of 60 Canadian cents, according to Thomson Reuters I/B/E/S.

Power Financial owns majority stakes in Great-West Lifeco (GWO.TO: Quote), Canada's largest insurer by market capitalization, and IGM Financial, the country's largest asset manager. The units have both reported quarterly results already.

Power Financial's stock was up 36 Canadian cents at C$24.92 in late on Friday morning on the Toronto Stock Exchange.

Winnipeg, Manitoba-based Great-West said earlier this week that its net profit dipped to C$491 million, or 51.7 Canadian cents a share, in the second quarter, from C$526 million, or 55.3 Canadian cents, a year earlier. That topped analysts' estimates of a profit of 48 Canadian cents a share.

IGM said net earnings dropped 19 percent to C$173 million, or 67 Canadian cents a share, from C$214 million, or 82 Canadian cents a share, a year earlier, as declining sales of mutual funds sideswiped revenues and sluggish global markets ate into the value of assets under management.

(Reporting By Andrea Hopkins; Editing by Peter Galloway)