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Manulife beats expectations as core Q3 profit flat but net income plunges

TORONTO — Manulife Financial Corp. beat expectations as its core net income were flat in the third quarter even though its net profit plunged by more than half to $723 million due to actuarial accounting assumptions.

The Toronto-based insurer says its core earnings for the period ended Sept. 30 were $1.53 billion, down from $1.54 billion a year earlier.

That equalled 76 cents per share, compared with 75 cents per share in the prior year.

Net income attributable to shareholders equalled $723 million or 35 cents per share, compared with $1.57 billion or 77 cents per share in the third quarter of 2018.

Manulife says the previously announced charges include a $500-million charge related to updated ultimate reinvestment rate (URR) assumption issued by the Canadian Actuarial Standards Board that reflect lower-than-expected returns.

Analysts had expected adjusted net income of $1.43 billion and earning per share of 73 cents per share, according to the financial markets data firm Refinitiv.

In recent quarters, the financial services company’s earnings has gotten a boost from its presence in Asia, including Hong Kong.

Meanwhile, the company has been taking steps to transform the overall organization, including aiming to free up $5 billion in capital by 2022.

As well, last June, Manulife announced it was cutting about 700 jobs as part of a plan to streamline and digitize its customer service operations.

This report by The Canadian Press was first published Nov. 6, 2019.

Companies in this story: (TSX:MFC)

The Canadian Press