July 31, 2008 / 6:54 PM / in 9 years

UPDATE 1-Power Financial operating profit up 3.5 pct

(Adds details, background)

TORONTO, July 31 (Reuters) - Power Financial Corp (PWF.TO) reported a higher quarterly profit on Thursday as the financial services holding company benefited from strong results at its insurance subsidiary.

Power Financial, a unit of Power Corp of Canada (POW.TO), posted net income of C$1.07 billion ($1.05 billion), or C$1.48 a diluted share, for the second quarter, ended June 30.

That was up from a profit of C$573 million, or 78 Canadian cents a share, in the year-before period.

One of its subsidiaries, insurer Great-West Lifeco (GWO.TO), posted sharply higher second-quarter profit thanks to a C$649 million gain on the April sale of its U.S. healthcare business.

Power Financial said its operating earnings rose 3.5 percent to C$590 million, or 82 Canadian cents a share, from C$570 million, or 78 Canadian cents, a year earlier.

Analysts had expected earnings of 79 Canadian cents a share before one-time items, according to Reuters Estimates.

Revenues and fee income in the quarter totaled C$6.06 billion, up from C$4.79 billion a year earlier.

Power Financial controls Great-West, Canada’s second-largest insurance company, as well as the country’s biggest mutual fund manager, IGM Financial Inc (IGM.TO). It also owns half of Partjointco NV, a company that controls Swiss company Pargesa Holding SA (PARG.S).

Power Financial’s stock, down about 18 percent in 2008, was up 14 Canadian cents at C$33.55 on Thursday afternoon on the Toronto Stock Exchange. ($1=$1.02 Canadian) (Reporting by Lynne Olver; editing by Rob Wilson)

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