August 3, 2012 / 3:38 PM / 6 years ago

Power Financial profit drops in line with expectations

(Reuters) - Canadian financial services company Power Financial (PWF.TO) said on Friday profit fell in the second quarter, in line with expectations, as mutual fund sales at its IGM Financial (IGM.TO) 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), 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

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