A month has gone by since the last earnings report for Manulife Financial (MFC Quick QuoteMFC - Free Report) . Shares have added about 9.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Manulife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Manulife Q1 Earnings Lag Estimates, Asia Business Soft

Manulife Financial delivered first-quarter 2022 core earnings of 61 cents per share, which missed the Zacks Consensus Estimate by 7.6%. The bottom line declined 4.7% year over year.

Core earnings of $1.5 billion (C$1.7 billion) decreased 4% from the prior-year quarter. The downside was due to lower new business gains in Asia, the unfavorable impact of markets on seed money investments in new segregated and mutual funds and lower in-force earnings in U.S. Annuities, primarily due to the variable annuity reinsurance transaction. These were limited by experience gains, in-force business growth in Canada and Asia, a higher yield on fixed income investments and lower cost of external debt in Corporate and Other, and higher new business gains in Canada and the United States.

New business value (NBV) in the reported quarter was $457 million (C$513 million), down 14% year over year due to lower business in Asia,

Annualized premium equivalent (APE) sales were $1.4 billion (C$1.6 billion), down 9% year over year due to lower sales in Asia.
           
The expense efficiency ratio deteriorated 150 basis points (bps) to 50%.

As of Mar 31, 2022, Manulife Financial’s financial leverage ratio improved 310 bps year over year to 26.4%.

Wealth and asset management assets under management and administration were $647 billion (C$808 billion), up 5.7% year over year. The Wealth and Asset Management business generated a net inflow of $6.2 billion (C$6.9 billion), nearly five-times year over year.

Core return on equity, measuring the company’s profitability, contracted 190 bps year over year to 11.8% in the first quarter of 2022.

Life Insurance Capital Adequacy Test (LICAT) ratio was 140% as of Mar 31, 2022, up from 137% as of Mar 31, 2021.

Book value per share excluding AOCI increased 15.7% to $24.12 as of Mar 31, 2022.

Segmental Performance

Global Wealth and Asset Management division’s core earnings came in at $479 million (C$324 million), up 3.8% year over year.

Asia division’s core earnings totaled $434 million (C$537 million), down 5.7% year over year.  In Asia, NBV decreased 28% to $391 million, reflecting lower sales volumes in Hong Kong and several markets in Asia Other due to the impact of COVID-19, lower corporate-owned life insurance ("COLI") product sales in Japan, and unfavorable product mix related to lower critical illness sales in mainland China. APE sales decreased 17% due to continued adverse impacts of COVID-19 in Hong Kong and several markets in Asia Other and lower sales in Japan.

Manulife Financial’s Canada division core earnings of $280 million (C$314 million) were up 18.9% year over year. NBV increased 33% year over year, driven by higher margins across all business lines. APE sales increased 2%, primarily driven by increased customer demand for its lower risk segregated fund products and higher mid-size group insurance sales, partially offset by variability in the large-case group insurance market.

The U.S. division reported core earnings of $433 million (C$486 million), down 3% year over year. NBV increased 57% year over year, driven by higher sales volumes and interest rates, and a favorable product mix. APE sales increased 32%, driven by the company’s differentiated domestic product offerings, which include the John Hancock Vitality feature and higher customer demand for insurance protection in the current COVID-19 environment of greater consumer interest in improving baseline health, and strong international sales.

Loss at Corporate and Other was $186 million (C$209 million), increasing 77% year over year.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted -6.43% due to these changes.

VGM Scores

At this time, Manulife has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Manulife has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Manulife belongs to the Zacks Insurance - Life Insurance industry. Another stock from the same industry, Brighthouse Financial (BHF Quick QuoteBHF - Free Report) , has gained 8.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

Brighthouse Financial reported revenues of $2.24 billion in the last reported quarter, representing a year-over-year change of -5.5%. EPS of $4.07 for the same period compares with $4.86 a year ago.

For the current quarter, Brighthouse Financial is expected to post earnings of $3.44 per share, indicating a change of -35.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.2% over the last 30 days.

Brighthouse Financial has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.