Manulife profit falls on equity markets, currency

Thu Aug 7, 2008 11:57am EDT
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By Lynne Olver

TORONTO (Reuters) - Manulife Financial Corp said net income dipped 8.5 percent in the second quarter, a bigger decline than expected, due to weak U.S. and Hong Kong equity markets, a stronger Canadian dollar and tax provisions.

But Manulife, North America's No. 2 life insurer, also raised its dividend by 8 percent to 26 Canadian cents a share.

It earned C$1.01 billion ($963.3 million), or 66 Canadian cents a share, down from year-earlier C$1.1 billion, or 71 Canadian cents a share.

Analysts had expected profit of 71 Canadian cents a share before exceptional items, according to Reuters Estimates.

Manulife shares fell as low as C$36.29 early on the Toronto Stock Exchange, but recovered some ground as the session went on. By late morning the stock was down 1.8 percent at C$36.92.

"Obviously the headline number was short of consensus, it's a slight miss," said Jukka Lipponen, insurance analyst at KBW.

"In the corporate segment they had a loss, and I was looking for positive earnings. But in terms of top-line growth, they had a lot of strength in a number of areas."

The higher Canadian dollar trimmed earnings by C$41 million in the quarter, Manulife said. About 70 percent of its income is denominated in foreign currencies.   Continued...