May 1, 2008 / 4:43 PM / 10 years ago

Great-West Life profit up, executives shuffled

TORONTO (Reuters) - Great-West Lifeco (GWO.TO) said on Thursday that earnings rose 27 percent in the first quarter, helped by one-time items in its U.S. business.

The company also said Chief Executive Ray McFeetors has been appointed chairman of the board, replacing Robert Gratton, who stepped down at the company’s annual meeting on Thursday.

Executive Vice President D. Allen Loney becomes president and CEO of Great-West, Canada’s second-largest life insurance company, and other management changes have been made at various operating subsidiaries.

The company said it earned C$654 million ($642 million) in the quarter ended March 31, or 73 Canadian cents a share. That was up from C$514 million, or 57 Canadian cents, in the same 2007 period.

Adjusted for two nonrecurring items, the Winnipeg, Manitoba-based company said its net income rose 4 percent to C$536 million, or 60 Canadian cents a share.

Analysts had expected the company to earn 62 Canadian cents a share, according to Reuters Estimates.

The nonrecurring items — a gain on the termination of a U.S. reinsurance agreement and an increase in policy reserves related to the sale of Great-West Healthcare — amounted to C$118 million after tax, or 13 Canadian cents a share, the company said.

Great-West said that a strong Canadian dollar reduced its reported net income by C$46 million, or about 5 Canadian cents a share.

The company, which is controlled by Montreal-based holding company Power Financial Corp (PWF.TO), owns various insurance and asset-management companies in Canada, the United States, Europe and Asia.

It acquired Boston-based money manager Putnam Investments Trust in August 2007, which elevated its sales in the latest quarter from the year-before period, as well as its assets and deposits.

Total premiums and deposits nearly tripled to C$29.8 billion in the first quarter from C$10.5 billion a year earlier, the company said.

Net income for Canadian operations rose 11 percent to C$249 million, despite lower sales of segregated and mutual funds.

In Europe, net income rose 19 percent to C$175 million, despite a 26 percent drop in total sales.

Shares of Great-West Lifeco are down about 10 percent on the Toronto Stock Exchange so far in 2008, a steeper decline than other financial stocks. The S&P/TSX financial index is down 4 percent year to date.

($1=$1.02 Canadian)

Reporting by Lynne Olver; Editing by Peter Galloway

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