TORONTO (Reuters) - Manulife Financial Corp (MFC.TO) reported a fourth-quarter profit on Thursday as it benefited from tax and investment gains, as well as stronger sales of insurance and wealth products in its Asian division.
Net income was well ahead of analysts’ estimates, but the core result - a measure Manulife introduced last quarter to separate out the volatile impact of financial markets - fell just short.
“We believe Manulife’s results should be well received, even if the initial reaction is lukewarm towards the miss on core,” Barclays Capital analyst John Aiken said.
The company, Canada’s largest life insurer, earned C$1.06 billion ($1.06 billion), or 56 Canadian cents a share, compared with a year-before loss of C$69 million, or 5 Canadian cents a share.
The results included C$368 million in investment gains and C$264 million in tax-related gains, the company said.
Excluding those items, core profit was 28 Canadian cents per share.
Analysts had expected net income of 31 Canadian cents a share and a core profit of 32 Canadian cents, according to Thomson Reuters I/B/E/S.
Manulife owns U.S. insurer John Hancock, but the region where it is banking on the strongest growth is Asia, where it already is in 11 countries.
Net profit from the division more than doubled to C$682 million from C$285 million, driven by a doubling in wealth management sales and the impact of financial markets on variable annuity investment products, the company said.
“Our Asian franchise delivered strong growth by expanding our distribution networks, including growing our bancassurance partnerships,” Manulife Chief Executive Officer Donald Guloien said in a statement.
The company’s Canadian division posted net income of C$251 million, up from C$246 million a year earlier. The U.S. division’s profit rose to $724 million from $505 million, helped by stronger equity markets and rising interest rates.
The company said it was on track to meet its goal of C$4 billion in core profit by 2016.
The results followed losses in both the second and third quarters, when the company suffered because of weak markets that make its investment products less appealing and also decrease the expected returns from the assets they hold to offset their long-dated insurance liabilities.
Manulife’s shares rose 24.5 percent last year due to economic optimism and bond market movements, but analysts say the stock may have come too far too fast and is in danger of snapping back.
($1 = 0.9968 Canadian dollars)
Reporting by Cameron French; Editing by Lisa Von Ahn