TORONTO (Reuters) - Profit fell 11.9 percent at Manulife Financial Corp (MFC.TO) in the first quarter due to declines in global stock markets, the insurance company said on Thursday as it also announced that President and Chief Executive Dominic D’Alessandro will step down next year.
Manulife, North America’s second-largest life insurer, earned C$869 million ($860 million), or 57 Canadian cents a share, in the three months ended March 31.
That compared with profit of C$986 million, or 63 Canadian cents a share, in the same 2007 period.
The Toronto-based company, which has operations in Canada, the United States, Japan and other Asian countries, said it took a noncash charge of C$265 million because of sharp declines in global equity markets in the quarter. That charge, which was required by actuarial practices, cut earnings by 18 Canadian cents a share, it said.
“Except for the decline in equity markets, our quarter was highly satisfactory,” CEO D’Alessandro said in a statement.
The company said that D’Alessandro will step down in May 2009, at Manulife’s annual meeting.
It did not name a replacement, but said it expects to announce a “CEO-designate” by the end of this year.
Analysts had expected the company to report earnings of 72 Canadian cents a share, according to Reuters Estimates.
Manulife stock fell 4.7 percent in morning trading to C$37.05 a share on the Toronto Stock Exchange. It is down nearly 9 percent so far in 2008, outperforming its rivals in the Canadian life insurance sector.
The company said its annualized return on equity, a measure of profitability, fell to 15.1 percent, down from 16.1 percent a year earlier.
Premiums and deposits slipped to C$17.8 billion, from C$18.8 billion a year earlier.
In February, D’Alessandro predicted that volatile financial markets would likely hurt the company’s wealth-management businesses.
Reporting by Lynne Olver and Cameron French; Editing by Peter Galloway