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) Q3 Earnings Lag Estimates on Soft Asia Business
Read MoreHide Full Article
Manulife Financial Corporation (MFC - Free Report) delivered third-quarter 2022 core earnings of 51 cents per share, which missed the Zacks Consensus Estimate by 3.8%. The bottom line declined 15% year over year.
Core earnings of $1 billion (C$1.3 billion) decreased 16.7% year over year. The decrease was due to a $256 million charge in the P&C Reinsurance business for estimated losses related to Hurricane Ian, lower net gains on sales of AFS equities and the unfavorable impact of markets on seed money investments in new and segregated mutual funds in Corporate and Other. Lower new business gains in Asia and the U.S., lower U.S. Annuities in-force earnings, and a higher charge from net unfavorable U.S. policyholder experience also added to the downside.
New business value (NBV) in the reported quarter was $394 million (C$514 million), down 7.9% year over year, attributable to solid sales volumes and favorable margins in the Canada and U.S. segments.
Annualized premium equivalent (APE) sales decreased 9% year over year to $1 billion (C$1.3 billion), attributable to lower sales in Asia, Canada and U.S. segments.
The expense efficiency ratio deteriorated 260 basis points (bps) to 53.9%. As of Sep 30, 2023, Manulife Financial’s leverage ratio deteriorated 330 bps year over year to 28.8.
Wealth and asset management assets under management and administration were $546.9 billion (C$748.8 billion), down 15.6% year over year. The Wealth and Asset Management business generated net inflows of $2.3 billion (C$3 billion), down 70% year over year. The decrease was due to lower gross flows and higher mutual fund redemption rates caused by decreased investor demand amid equity market declines and higher interest rates, and higher redemptions, partially offset by higher sales of equity and fixed-income mandates.
Core return on equity, measuring the company’s profitability, contracted 170 bps year over year to 10.3%.
Life Insurance Capital Adequacy Test ratio was 136% as of Sep 30, 2022, down from 138% as of Sep 30, 2021.
Manulife Financial Corp Price, Consensus and EPS Surprise
Global Wealth and Asset Management division’s core earnings came in at $264.4 million (C$ 345 million), down 5.2% year over year.
Asia division’s core earnings totaled $393 million (C$513 million), down 7.1% year over year. In Asia, NBV decreased 17% year over year, reflecting lower sales in Hong Kong and changes in product mix in Asia and Other. It was partially offset by higher individual protection and other wealth sales in Japan.
APE sales decreased 7% due to lower sales in Hong Kong. It was partially offset by higher sales in Japan, Asia and Other.
Manulife Financial’s Canada division’s core earnings of $268 million (C$350 million) were up 8.5% year over year. In Canada, NBV increased 25% year over year, driven by higher margins in its insurance businesses. It was partially offset by lower volumes in Annuities.
APE sales decreased 6% due to lower segregated fund sales and the non-recurrence of a large affinity markets sale in the third quarter of 2021. It was partially offset by the normal variability of large-case group insurance sales.
The U.S. division reported core earnings of $500 million (C$384 million), up 28.5% year over year. NBV increased 27% year over year, driven by improved margins due to pricing actions, higher interest rates and changes in product mix.
APE sales decreased 1%, primarily due to lower sales of domestic life insurance products. It was partially offset by an increase in international sales, which are reported as part of U.S. segment results.
Zacks Rank
Manulife Financial currently carries a Zacks Rank #5 (Strong Sell).
Of the life insurance industry players that have reported third-quarter results so far, Voya Financial, Inc. (VOYA - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) beat the respective Zacks Consensus Estimate for earnings, while Lincoln National Corporation (LNC - Free Report) missed the mark.
Voya Financial reported third-quarter 2022 adjusted operating earnings of $2.30 per share, which surpassed the Zacks Consensus Estimate by 84%. The bottom line, however, decreased 10.5% year over year. Total revenues amounted to $1.3 billion, which decreased 33.4% year over year.
Net investment income declined 22.4% year over year to $522 million. Fee income of $435 million decreased 10.7% year over year. Premiums totaled $607 million, up 11.6% from the year-ago quarter. Total expenses were $1.2 billion, down 10% from the year-ago quarter.
Reinsurance Group of America reported third-quarter 2022 adjusted operating earnings of $5.20 per share, which beat the Zacks Consensus Estimate by 76.8%. Moreover, the bottom line rebounded from the year-ago loss of $1.11. Net foreign currency fluctuations had an adverse effect of 15 cents per share on adjusted operating income.
Reinsurance Group's operating revenues of $4.2 billion beat the Zacks Consensus Estimate by 5%. The top line also improved 5.4% year over year on higher net premiums and other revenues. Net premiums of $3.2 billion rose 4.9% year over year. Investment income decreased 7.6% from the prior-year quarter to $374 million, reflecting lower variable investment income.
Lincoln National incurred third-quarter 2022 adjusted loss of $10.23 per share. The Zacks Consensus Estimate was earnings of $1.93 per share. Earnings of $1.62 per share were reported in the prior-year quarter.
Adjusted operating revenues amounted to $4,630 million, which dropped 11% year over year. However, the top line beat the consensus mark by 5.9% and came above our estimate of $4,387.1 million. Lincoln National’s expenses of $7,935 million increased 62.8% year over year in the quarter under review.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Manulife (MFC) Q3 Earnings Lag Estimates on Soft Asia Business
Manulife Financial Corporation (MFC - Free Report) delivered third-quarter 2022 core earnings of 51 cents per share, which missed the Zacks Consensus Estimate by 3.8%. The bottom line declined 15% year over year.
Core earnings of $1 billion (C$1.3 billion) decreased 16.7% year over year. The decrease was due to a $256 million charge in the P&C Reinsurance business for estimated losses related to Hurricane Ian, lower net gains on sales of AFS equities and the unfavorable impact of markets on seed money investments in new and segregated mutual funds in Corporate and Other. Lower new business gains in Asia and the U.S., lower U.S. Annuities in-force earnings, and a higher charge from net unfavorable U.S. policyholder experience also added to the downside.
New business value (NBV) in the reported quarter was $394 million (C$514 million), down 7.9% year over year, attributable to solid sales volumes and favorable margins in the Canada and U.S. segments.
Annualized premium equivalent (APE) sales decreased 9% year over year to $1 billion (C$1.3 billion), attributable to lower sales in Asia, Canada and U.S. segments.
The expense efficiency ratio deteriorated 260 basis points (bps) to 53.9%. As of Sep 30, 2023, Manulife Financial’s leverage ratio deteriorated 330 bps year over year to 28.8.
Wealth and asset management assets under management and administration were $546.9 billion (C$748.8 billion), down 15.6% year over year. The Wealth and Asset Management business generated net inflows of $2.3 billion (C$3 billion), down 70% year over year. The decrease was due to lower gross flows and higher mutual fund redemption rates caused by decreased investor demand amid equity market declines and higher interest rates, and higher redemptions, partially offset by higher sales of equity and fixed-income mandates.
Core return on equity, measuring the company’s profitability, contracted 170 bps year over year to 10.3%.
Life Insurance Capital Adequacy Test ratio was 136% as of Sep 30, 2022, down from 138% as of Sep 30, 2021.
Manulife Financial Corp Price, Consensus and EPS Surprise
Manulife Financial Corp price-consensus-eps-surprise-chart | Manulife Financial Corp Quote
Segmental Performance
Global Wealth and Asset Management division’s core earnings came in at $264.4 million (C$ 345 million), down 5.2% year over year.
Asia division’s core earnings totaled $393 million (C$513 million), down 7.1% year over year. In Asia, NBV decreased 17% year over year, reflecting lower sales in Hong Kong and changes in product mix in Asia and Other. It was partially offset by higher individual protection and other wealth sales in Japan.
APE sales decreased 7% due to lower sales in Hong Kong. It was partially offset by higher sales in Japan, Asia and Other.
Manulife Financial’s Canada division’s core earnings of $268 million (C$350 million) were up 8.5% year over year. In Canada, NBV increased 25% year over year, driven by higher margins in its insurance businesses. It was partially offset by lower volumes in Annuities.
APE sales decreased 6% due to lower segregated fund sales and the non-recurrence of a large affinity markets sale in the third quarter of 2021. It was partially offset by the normal variability of large-case group insurance sales.
The U.S. division reported core earnings of $500 million (C$384 million), up 28.5% year over year. NBV increased 27% year over year, driven by improved margins due to pricing actions, higher interest rates and changes in product mix.
APE sales decreased 1%, primarily due to lower sales of domestic life insurance products. It was partially offset by an increase in international sales, which are reported as part of U.S. segment results.
Zacks Rank
Manulife Financial currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Life Insurers
Of the life insurance industry players that have reported third-quarter results so far, Voya Financial, Inc. (VOYA - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) beat the respective Zacks Consensus Estimate for earnings, while Lincoln National Corporation (LNC - Free Report) missed the mark.
Voya Financial reported third-quarter 2022 adjusted operating earnings of $2.30 per share, which surpassed the Zacks Consensus Estimate by 84%. The bottom line, however, decreased 10.5% year over year. Total revenues amounted to $1.3 billion, which decreased 33.4% year over year.
Net investment income declined 22.4% year over year to $522 million. Fee income of $435 million decreased 10.7% year over year. Premiums totaled $607 million, up 11.6% from the year-ago quarter. Total expenses were $1.2 billion, down 10% from the year-ago quarter.
Reinsurance Group of America reported third-quarter 2022 adjusted operating earnings of $5.20 per share, which beat the Zacks Consensus Estimate by 76.8%. Moreover, the bottom line rebounded from the year-ago loss of $1.11. Net foreign currency fluctuations had an adverse effect of 15 cents per share on adjusted operating income.
Reinsurance Group's operating revenues of $4.2 billion beat the Zacks Consensus Estimate by 5%. The top line also improved 5.4% year over year on higher net premiums and other revenues. Net premiums of $3.2 billion rose 4.9% year over year. Investment income decreased 7.6% from the prior-year quarter to $374 million, reflecting lower variable investment income.
Lincoln National incurred third-quarter 2022 adjusted loss of $10.23 per share. The Zacks Consensus Estimate was earnings of $1.93 per share. Earnings of $1.62 per share were reported in the prior-year quarter.
Adjusted operating revenues amounted to $4,630 million, which dropped 11% year over year. However, the top line beat the consensus mark by 5.9% and came above our estimate of $4,387.1 million. Lincoln National’s expenses of $7,935 million increased 62.8% year over year in the quarter under review.