We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Manulife (MFC) Q1 Earnings Grow on Strong Segmental Results
Read MoreHide Full Article
Manulife Financial Corporation (MFC - Free Report) reported first-quarter 2018 core earnings of $1.03 billion (C$1,303 million), up 22% year over year. This upside stemmed from higher investment-related experience gains in core earnings, strong growth in Asia and Global Wealth and Asset Management, improved policyholder experience in Canada and a favorable impact of lower U.S. tax rates.
Manulife Financial Corp Price, Consensus and EPS Surprise
Premiums and deposits were $38 million (C$48.1 million), up about 11.6% year over year.
New business value in the reported quarter was $303.7 million (C$384 million), down 0.6% year over year.
Annualized premium equivalent sales decreased 10% year over year to $1.1 billion (C$1.4 billion) due to lower sales in Asia, Canada and the United States.
As of Mar 31, 2018, Manulife’s financial leverage ratio improved 60 basis points (bps) to 26.7% from Dec 31, 2017, driven by an increase in equity due to changes in foreign currency exchange rates as well as growth in retained earnings.
As of Mar 31, 2018, assets under management were $0.85 trillion (C$1.1 trillion), up 6.2% year over year.
Core return on equity, measuring the company’s profitability, expanded 230 bps year over year to 13.4%.
The Office of the Superintendent of Financial Institutions' new Life Insurance Capital Adequacy Test (LICAT) regulatory capital regime came into effect in Canada on Jan 1, 2018, replacing the Minimum Continuing Capital and Surplus framework. LICAT ratio was 129% at Mar 31, 2018.
Segmental Performance
Effective Jan1, 2018, Global Wealth and Asset Management has become a reportable segment for the company.
Global Wealth and Asset Management division’s core earnings came in at $179.5 million (C$227 million), up 20.7% year over year owing to higher fee income on greater average asset levels and lower U.S. tax rates. Net flows were $7.9 billion (C$10.0 billion), up 117.4% year over year.
Asia division core earnings came in at $338 million, up 25.2% year over year and driven by a combination of growth in new business volumes, favorable product mix, solid in-force business growth as well as scale benefits in Hong Kong and Asia Other, partially offset by lower core earnings in Japan due to contracted new business volumes. Annualized premium equivalents sales however declined 26% year over year to $257 million in the first quarter due to lower sales volumes in Japan. However, strong growth in Hong Kong partially offset the downside.
Manulife’s Canada division core earnings of $265 million (C$335 million) were up 14% year over year due to improved claims experience in group insurance long-term disability business.
Annualized premium equivalent sales were $229.4 million (C$290 million), down 23% and attributable to large-case sale in group benefits and elevated individual insurance sales in first-quarter 2017 on tax-exempt changes.
The U.S. division reported core earnings of $341 million, up 2.4% year over year. This upside was fueled by a favorable impact of lower U.S. tax rates and a gain related to a historical annuity reinsurance item, partially offset by the impact of lower sales volumes, product mix changes and a less favorable policyholder experience. Annualized premium equivalents sales of $90 million declined 20%, attributable to lower international and variable universal life sales and exiting sales of COLI/ BOLI products
Dividend Update
The company’s board of directors approved 22 cents per share in dividends to shareholders of record as of May 15, 2018. The dividend will be paid on and after Jun 19.
Among other players from the life insurance industry having reported first-quarter earnings so far, the bottom line of Lincoln National Corporation (LNC - Free Report) and Genworth Financial, Inc. (GNW - Free Report) beat their respective Zacks Consensus Estimate while Reinsurance Group of America, Incorporated's (RGA - Free Report) earnings missed the same.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Manulife (MFC) Q1 Earnings Grow on Strong Segmental Results
Manulife Financial Corporation (MFC - Free Report) reported first-quarter 2018 core earnings of $1.03 billion (C$1,303 million), up 22% year over year. This upside stemmed from higher investment-related experience gains in core earnings, strong growth in Asia and Global Wealth and Asset Management, improved policyholder experience in Canada and a favorable impact of lower U.S. tax rates.
Manulife Financial Corp Price, Consensus and EPS Surprise
Manulife Financial Corp Price, Consensus and EPS Surprise | Manulife Financial Corp Quote
Premiums and deposits were $38 million (C$48.1 million), up about 11.6% year over year.
New business value in the reported quarter was $303.7 million (C$384 million), down 0.6% year over year.
Annualized premium equivalent sales decreased 10% year over year to $1.1 billion (C$1.4 billion) due to lower sales in Asia, Canada and the United States.
As of Mar 31, 2018, Manulife’s financial leverage ratio improved 60 basis points (bps) to 26.7% from Dec 31, 2017, driven by an increase in equity due to changes in foreign currency exchange rates as well as growth in retained earnings.
As of Mar 31, 2018, assets under management were $0.85 trillion (C$1.1 trillion), up 6.2% year over year.
Core return on equity, measuring the company’s profitability, expanded 230 bps year over year to 13.4%.
The Office of the Superintendent of Financial Institutions' new Life Insurance Capital Adequacy Test (LICAT) regulatory capital regime came into effect in Canada on Jan 1, 2018, replacing the Minimum Continuing Capital and Surplus framework. LICAT ratio was 129% at Mar 31, 2018.
Segmental Performance
Effective Jan1, 2018, Global Wealth and Asset Management has become a reportable segment for the company.
Global Wealth and Asset Management division’s core earnings came in at $179.5 million (C$227 million), up 20.7% year over year owing to higher fee income on greater average asset levels and lower U.S. tax rates. Net flows were $7.9 billion (C$10.0 billion), up 117.4% year over year.
Asia division core earnings came in at $338 million, up 25.2% year over year and driven by a combination of growth in new business volumes, favorable product mix, solid in-force business growth as well as scale benefits in Hong Kong and Asia Other, partially offset by lower core earnings in Japan due to contracted new business volumes. Annualized premium equivalents sales however declined 26% year over year to $257 million in the first quarter due to lower sales volumes in Japan. However, strong growth in Hong Kong partially offset the downside.
Manulife’s Canada division core earnings of $265 million (C$335 million) were up 14% year over year due to improved claims experience in group insurance long-term disability business.
Annualized premium equivalent sales were $229.4 million (C$290 million), down 23% and attributable to large-case sale in group benefits and elevated individual insurance sales in first-quarter 2017 on tax-exempt changes.
The U.S. division reported core earnings of $341 million, up 2.4% year over year. This upside was fueled by a favorable impact of lower U.S. tax rates and a gain related to a historical annuity reinsurance item, partially offset by the impact of lower sales volumes, product mix changes and a less favorable policyholder experience. Annualized premium equivalents sales of $90 million declined 20%, attributable to lower international and variable universal life sales and exiting sales of COLI/ BOLI products
Dividend Update
The company’s board of directors approved 22 cents per share in dividends to shareholders of record as of May 15, 2018. The dividend will be paid on and after Jun 19.
Zacks Rank
Manulife carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the life insurance industry having reported first-quarter earnings so far, the bottom line of Lincoln National Corporation (LNC - Free Report) and Genworth Financial, Inc. (GNW - Free Report) beat their respective Zacks Consensus Estimate while Reinsurance Group of America, Incorporated's (RGA - Free Report) earnings missed the same.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>