November 12, 2009 / 8:50 PM / 9 years ago

UPDATE 1-Power Corp profit sags as units, investments down

* Q3 EPS C$0.52 vs C$0.71 year ago

* Below expectations for C$0.61 EPS

TORONTO, Nov 12 (Reuters) - Power Corp of Canada (POW.TO) posted a 25 percent drop in third-quarter profit on Thursday as key operating subsidiaries contributed less and income and investments dropped.

The Montreal-based holding company said net income was C$250 million ($236 million), or 52 Canadian cents a share, in the three months ended Sept. 30. That was down from C$332 million, or 70 Canadian cents a share, a year earlier.

Power Corp, controlled by Montreal’s Desmarais family, said operating earnings were C$252 million, or 53 Canadian cents a share, down from C$334 million, or 71 Canadian cents a share.

Analysts had expected earnings of 61 Canadian cents a share, according to Thomson Reuters I/B/E/S.

The company owns 66 percent of Power Financial Corp (PWF.TO), which in turn controls insurance company Great West Lifeco (GWO.TO) and mutual fund company IGM Financial (IGM.TO). Great West’s profit rose in the third quarter, while IGM’s profit was down 16 percent.

On Thursday, Power Financial said its net income for the quarter edged 1 percent lower, coming in slightly below analysts’ estimates.

Power Corp said subsidiaries contributed C$288 million to its operating earnings, down from $293 million last year.

“The decrease in operating earnings in 2009 also reflects a lower level of income from investments compared with 2008,” Power Corp said in a statement.

Shares of Power Corp were down 0.5 percent at C$26.85 late Thursday afternoon on the Toronto Stock Exchange, while Power Financial shares were 0.2 percent lower.

$1=$1.06 Canadian Reporting by Andrea Hopkins; editing by Rob Wilson

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