Weak markets send Manulife Financial to loss
TORONTO (Reuters) - Manulife Financial Corp (MFC.TO: Quote) fell to a second-quarter loss as weak financial markets forced the company to take a C$677 million ($680.4 million) charge to revalue long-term investment assumptions, but the result beat analysts' expectations.
Manulife, Canada's No. 2 insurer by market capitalization, also warned it could take a charge of as much as C$1 billion in the third quarter as part of its annual review of actuarial assumptions.
It said continued macroeconomic headwinds made achieving its 2015 profit goals "a stretch."
The Toronto-based company said it lost C$300 million, or 18 Canadian cents a share, compared with a year-before profit of C$490 million, or 26 Canadian cents a share.
The C$677 million charge was slightly smaller than expected, as Manulife had warned it would take a hit in the C$700-C$800 million range to alter investment assumptions to account for falling bond yields.
Analysts had expected a net loss of 48 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The company said the markets-related impact would have been worse if not for hedging put in place in recent quarters.
But it warned of the rising challenge of meeting its goal of boosting profit to C$4 billion by 2015.
"We would like to remind investors that due to the unfavorable economic conditions we increasingly view our goal ... as a stretch target," Manulife Chief Financial Officer Steve Roder said in a statement. Continued...