Manulife shares rise despite steep loss
By Cameron French
TORONTO (Reuters) - Manulife Financial (MFC.TO: Quote) turned in a steeper than expected quarterly loss on Thursday and said its 2015 C$4 billion profit goal may be at risk, but its shares rose as the insurer's results looked good when compared with its peers.
Speaking on a conference call, Chief Executive Donald Guloien also said he would welcome an opportunity to "unlock shareholder value" in Manulife's U.S. John Hancock division, but did not elaborate on what measures he would consider.
Shares of Canada's largest insurer rose 4.5 percent as its miss of consensus estimates looked good compared to gloomier results from rivals Sun Life Financial (SLF.TO: Quote) and Industrial Alliance (IAG.TO: Quote).
"I was more concerned with what the underlying performance was going to look like, and I think Manulife was the winner this quarter," said Edward Jones analyst Craig Fehr, citing strength in its core insurance and wealth management business.
"That to me is a more important indicator of where these stocks will go long term."
As has been the case in several recent quarters, a sharp drop in equity markets and low bond yields forced the insurer to raise its reserves to guarantee future liabilities, thus stripping more than C$1 billion ($992 million) from its bottom line. Other charges added to the loss.
The Toronto Stock Exchange's benchmark S&P/TSX composite index .GSPTSE fell 12.6 percent in the third quarter, while bond yields retreated due to economic uncertainty in Europe and the U.S. Federal Reserve's purchases of long-term bonds.
C$1.28 BILLION LOSS Continued...