August 3, 2011 / 10:34 PM / in 6 years

WRAPUP 1-Insurers Sun Life, Great-West top estimates

* Sun Life OP EPS C$0.73 vs est C$0.54

* Great-West EPS C$0.55 vs est C$0.49 (Wraps Sun Life, Great-West results)

By Cameron French

TORONTO, Aug 3 (Reuters) - Sun Life Financial SLF.TO and Great-West Lifeco GWO.TO reported better than expected second-quarter profit on Wednesday, helped by surprisingly strong market-related results.

The insurers’ healthy profits could raise expectations for sector heavyweight Manulife Financial MFC.TO, which reports next week.

Sun Life, Canada’s No. 3 insurer, said it earned a net C$408 million ($425 million), or 68 Canadian cents a share, in the quarter ended June 30. That compared with a profit of C$72 million, or 13 Canadian cents a share, in the year-before period.

On an operating basis, Sun Life earned C$425 million, or 73 Canadian cents a share, topping analysts’ expectations of a profit of 54 Canadian cents a share.

The 2010 profit was revised lower from previous reports when Sun Life adopted International Financial Reporting Standards (IFRS) on Jan. 1 of this year.

“Sun Life’s earnings actually benefited from their market activities, whereas the Street was expecting that to weigh on earnings,” said Barclays Capital analyst John Aiken.

Both stock market and bond yields declined during the quarter, but Sun Life said weaker equity markets had only a modest negative impact, while the interest rate environment actually benefited the bottom line.

Aiken said this could alter predictions that Sun Life rival Manulife will take a big hit from the markets when it reports next week, although he cautioned that Manulife is more sensitive to market movements than Sun Life or Great-West.

“This definitely brings into question consensus numbers,” he said.

GREAT-WEST PROFIT

Profit at No. 2 insurer Great-West Lifeco GWO.TO rose 15.6 percent, helped by strong investment returns and insurance sales in its core Canadian business, and the release of a legal provision at its U.S. Putnam Investments business, which boosted earnings by C$55 million.

The Winnipeg-based company, a unit of Power Financial PWF.TO, earned C$526 million ($548 million), or 55 Canadian cents a share, in the quarter ended June 30.

That compared with a profit of C$455 million, or 48 Canadian cents a share, in the year-before period.

Analysts had expected a profit of 49 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Sun Life shares rose 0.6 percent to C$25.96 on the Toronto Stock Exchange on Wednesday, while Great-West gained 2.6 percent to C$23.38.

The results were released after markets closed.

$1=$0.96 Canadian Reporting by Cameron French; editing by Rob Wilson

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