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Manulife Financial Corporation (MFC - Free Report) delivered fourth-quarter 2022 core earnings of 65 cents per share, which beat the Zacks Consensus Estimate by 6.6%. The bottom line declined 3% year over year.
Core earnings of $1.3 billion (C$1.7 billion) decreased 2% year over year. The decrease was attributable to lower net fee income from lower average assets under management and administration in Global Wealth and Asset Management, lower new business gains in Asia and the U.S., and lower in-force earnings in U.S. Annuities due to the variable annuity reinsurance transactions.
Manulife Financial Corp Price, Consensus and EPS Surprise
New business value (NBV) in the reported quarter was $290.2 million (C$525 million), down 9% year over year, attributable to lower sales volumes in Asia.
Annualized premium equivalent (APE) sales decreased 12% year over year to $0.9 billion (C$1.3 billion), attributable to lower sales in Asia, Canada and U.S. segments.
The expense efficiency ratio increased 190 basis points (bps) to 50.9%. As of Dec 31, 2023, Manulife Financial’s leverage ratio deteriorated 190 bps year over year to 27.7.
Wealth and asset management assets under management and administration were $575.7 billion (C$779.9 billion), down 8.9% year over year. The Wealth and Asset Management business generated net outflows of $6.1 billion (C$8.3 billion) against an inflow of C$8.1 million in the year-ago quarter. This was due to net outflows at Retirement and Retail.
Core return on equity, measuring the company’s profitability, expanded 50 bps year over year to 13.2%.
The Life Insurance Capital Adequacy Test ratio was 131% as of Dec 31, 2022, down from 142% as of Dec 31, 2021.
Segmental Performance
Global Wealth and Asset Management division’s core earnings were $197 million (C$ 267 million), down 31% year over year.
Asia division’s core earnings totaled $419 million (C$569 million), up 4% year over year. In Asia, NBV decreased 17% year over year, reflecting lower sales in Hong Kong and unfavorable changes in product mix in Asia Other, partially offset by the benefit of rising interest rates, and higher individual protection and other wealth sales in Japan.
APE sales decreased 9% due to lower sales in Hong Kong. It was partially offset by higher sales in Japan and Asia Other.
Manulife Financial’s Canada division’s core earnings of $258 million (C$350 million) were up 22.4% year over year. In Canada, NBV increased 6% year over year, with higher margins in our insurance businesses, partially offset by lower volumes in annuities.
APE sales decreased 15% due to lower segregated fund and participating insurance sales, partially offset by higher small business group insurance sales.
The U.S. division reported core earnings of $275 million (C$374 million), down 19.9% year over year. NBV increased 12% year over year, driven by higher interest rates, higher international sales volumes and product actions, partially offset by lower brokerage sales volumes.
APE sales decreased 21% primarily due to lower sales of domestic life insurance products, partially offset by an increase in international sales, which are reported as part of U.S. segment results.
Reinsurance Group of America, Incorporated (RGA - Free Report) reported a fourth-quarter 2022 adjusted operating income of $2.99 per share, which missed the Zacks Consensus Estimate by 14.8%. RGA incurred an operating loss of 56 cents per share in the prior-year quarter.
Operating revenues of $4.4 billion increased 2.2% year over year. The top line beat the Zacks Consensus Estimate by 1.2%. Net premiums of $3.4 billion rose 1.1% year over year.
Voya Financial (VOYA - Free Report) reported fourth-quarter 2022 adjusted operating earnings of $2.18 per share, which surpassed the Zacks Consensus Estimate by 42.5%. The bottom line increased 14.7% year over year.
Adjusted operating revenues amounted to $1.5 billion, which decreased 4.4% year over year. Premiums totaled $610 million, up 12.1% from the year-ago quarter.
Sun Life Financial (SLF - Free Report) reported a fourth-quarter 2022 adjusted operating income of $1.25 per share, beating the Zacks Consensus Estimate by 7.8%. The bottom line increased 3.3% year over year. The underlying net income of $729 million (C$990 million) was up 10% year over year, which was driven by earnings growth in the United States and Canada.
Insurance sales increased 14.8% year over year to $1.3 billion (C$1.8 billion), driven by increased sales in Canada, Asia and the United States. Wealth sales were $33.6 billion (C$45.6 billion), down 17% year over year. The value of the new business decreased 5.3% to $345 million (C$468 million).
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Manulife Financial (MFC) Q4 Earnings Beat Estimates, Dip Y/Y
Manulife Financial Corporation (MFC - Free Report) delivered fourth-quarter 2022 core earnings of 65 cents per share, which beat the Zacks Consensus Estimate by 6.6%. The bottom line declined 3% year over year.
Core earnings of $1.3 billion (C$1.7 billion) decreased 2% year over year. The decrease was attributable to lower net fee income from lower average assets under management and administration in Global Wealth and Asset Management, lower new business gains in Asia and the U.S., and lower in-force earnings in U.S. Annuities due to the variable annuity reinsurance transactions.
Manulife Financial Corp Price, Consensus and EPS Surprise
Manulife Financial Corp price-consensus-eps-surprise-chart | Manulife Financial Corp Quote
New business value (NBV) in the reported quarter was $290.2 million (C$525 million), down 9% year over year, attributable to lower sales volumes in Asia.
Annualized premium equivalent (APE) sales decreased 12% year over year to $0.9 billion (C$1.3 billion), attributable to lower sales in Asia, Canada and U.S. segments.
The expense efficiency ratio increased 190 basis points (bps) to 50.9%. As of Dec 31, 2023, Manulife Financial’s leverage ratio deteriorated 190 bps year over year to 27.7.
Wealth and asset management assets under management and administration were $575.7 billion (C$779.9 billion), down 8.9% year over year. The Wealth and Asset Management business generated net outflows of $6.1 billion (C$8.3 billion) against an inflow of C$8.1 million in the year-ago quarter. This was due to net outflows at Retirement and Retail.
Core return on equity, measuring the company’s profitability, expanded 50 bps year over year to 13.2%.
The Life Insurance Capital Adequacy Test ratio was 131% as of Dec 31, 2022, down from 142% as of Dec 31, 2021.
Segmental Performance
Global Wealth and Asset Management division’s core earnings were $197 million (C$ 267 million), down 31% year over year.
Asia division’s core earnings totaled $419 million (C$569 million), up 4% year over year. In Asia, NBV decreased 17% year over year, reflecting lower sales in Hong Kong and unfavorable changes in product mix in Asia Other, partially offset by the benefit of rising interest rates, and higher individual protection and other wealth sales in Japan.
APE sales decreased 9% due to lower sales in Hong Kong. It was partially offset by higher sales in Japan and Asia Other.
Manulife Financial’s Canada division’s core earnings of $258 million (C$350 million) were up 22.4% year over year. In Canada, NBV increased 6% year over year, with higher margins in our insurance businesses, partially offset by lower volumes in annuities.
APE sales decreased 15% due to lower segregated fund and participating insurance sales, partially offset by higher small business group insurance sales.
The U.S. division reported core earnings of $275 million (C$374 million), down 19.9% year over year. NBV increased 12% year over year, driven by higher interest rates, higher international sales volumes and product actions, partially offset by lower brokerage sales volumes.
APE sales decreased 21% primarily due to lower sales of domestic life insurance products, 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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Life Insurers
Reinsurance Group of America, Incorporated (RGA - Free Report) reported a fourth-quarter 2022 adjusted operating income of $2.99 per share, which missed the Zacks Consensus Estimate by 14.8%. RGA incurred an operating loss of 56 cents per share in the prior-year quarter.
Operating revenues of $4.4 billion increased 2.2% year over year. The top line beat the Zacks Consensus Estimate by 1.2%. Net premiums of $3.4 billion rose 1.1% year over year.
Voya Financial (VOYA - Free Report) reported fourth-quarter 2022 adjusted operating earnings of $2.18 per share, which surpassed the Zacks Consensus Estimate by 42.5%. The bottom line increased 14.7% year over year.
Adjusted operating revenues amounted to $1.5 billion, which decreased 4.4% year over year. Premiums totaled $610 million, up 12.1% from the year-ago quarter.
Sun Life Financial (SLF - Free Report) reported a fourth-quarter 2022 adjusted operating income of $1.25 per share, beating the Zacks Consensus Estimate by 7.8%. The bottom line increased 3.3% year over year. The underlying net income of $729 million (C$990 million) was up 10% year over year, which was driven by earnings growth in the United States and Canada.
Insurance sales increased 14.8% year over year to $1.3 billion (C$1.8 billion), driven by increased sales in Canada, Asia and the United States. Wealth sales were $33.6 billion (C$45.6 billion), down 17% year over year. The value of the new business decreased 5.3% to $345 million (C$468 million).