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 Financial (MFC) Q2 Earnings Top on Solid Asia Business
Read MoreHide Full Article
Manulife Financial Corporation (MFC - Free Report) delivered second-quarter 2023 core earnings of 62 cents per share, which beat the Zacks Consensus Estimate of 60 cents. The bottom line improved 1.6% year over year.
Core earnings of $1.2 billion (C$1.6 billion) increased 7.3% year over year. The improvement was driven by an increase in expected investment earnings related to higher investment yields and business growth, higher returns on surplus assets net of higher cost of debt financing and a smaller net charge in the provision for expected credit loss.
Manulife Financial Corp Price, Consensus and EPS Surprise
New business value (NBV) in the reported quarter was $435 million (C$585 million), up 10% year over year, attributable to higher sales volumes in Asia, Canada and the United States.
New business contractual service margin (CSM) of $441 million (C$592 million) rose 15% year over year.
Annualized premium equivalent (APE) sales increased 12% year over year to $1.2 billion (C$1.6 billion), attributable to higher sales in Asia.
Expense efficiency ratio increased 200 basis points (bps) to 45.1%.
Wealth and asset management assets under management and administration were $618.1 billion (C$819.6 billion), up 9.7% year over year. The Wealth and Asset Management business generated net outflows of $1.6 billion (C$2.2 billion), up 29.4%. This was due to lower net outflows at Retail.
Core return on equity, measuring the company’s profitability, expanded 40 bps year over year to 15.5%. Financial leverage ratio improved 20 basis points to 25.8% at quarter end.
Life Insurance Capital Adequacy Test ratio was 136% as of Jun 30, 2023, up from 131% as of Dec 31, 2022.
Adjusted book value per common share was $29.42, up 4.8% year over year.
Segmental Performance
Global Wealth and Asset Management division’s core earnings came in at $238 million (C$320 million), down 2.1% year over year.
Asia division’s core earnings totaled $352 million (C$473 million), up 5.1% year over year. NBV increased 3% year over year, driven by higher sales volumes, partially offset by the business mix.
APE sales increased 26%, driven by growth in Hong Kong and Asia other. New business CSM increased 26% year over year, driven by higher sales volumes and model refinements, partially offset by business mix
Manulife Financial’s Canada division core earnings of $277 million (C$372 million) were up 2.2% year over year. NBV increased 29%, driven by higher margins in all business lines largely due to product mix, partially offset by lower sales volumes in Annuities and Group Insurance.
APE sales decreased 11% due to usual variability in the group insurance market, with lower large-case sales, partially offset by higher mid-size business sales, as well as lower sales of segregated fund products. New business CSM increased 21% driven by product mix in Individual Insurance.
The U.S. division reported core earnings of $341 million (C$458 million), up 7% year over year. NBV increased 43% due to pricing actions, higher interest rates and product mix, partially offset by lower sales volumes.
APE sales decreased 15% due to the adverse impact of higher short-term interest rates on accumulation insurance products, particularly for its higher net worth customers. New business CSM decreased 17% due to lower sales volumes.
Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2023 adjusted operating earnings of $2.31 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 38.3% year over year on strong net underwriting results. Adjusted operating revenues amounted to $347 billion, which increased 43.4% year over year. The top line also beat the Zacks Consensus Estimate by 8.8%.
Net investment income declined 6.2% year over year to $545 million. Meanwhile, fee income of $474 million increased 14.8% year over year. Premiums totaled $677 million, up 13.4% from the year-ago quarter. Total benefits and expenses were $1.6 billion, up 17.2% from the year-ago quarter. As of Jun 30, 2023, VOYA’s assets under management, and assets under administration and advisement totaled $789 million.
Lincoln National Corporation (LNC - Free Report) reported second-quarter 2023 adjusted earnings of $2.02 per share, which outpaced the Zacks Consensus Estimate by 5.2%. However, the bottom line slipped 5.2% year over year. Adjusted operating revenues grew 5.7% year over year to $4,730 million. The top line beat the consensus mark by 2.8%. Total expenses plunged 48.8% year over year to $2,327 million in the quarter under review and remained below our estimate of $3,103.4 million due to the incidence of a significant MRB gain.
The Annuities segment recorded an operating income of $271 million, which decreased 8% year over year and missed the consensus estimate by 6.3%. The metric suffered from reduced prepayment income and increased expenses. Operating income in the Retirement Plan Services segment came in at $47 million, which plunged 14.5% year over year and missed our estimate of $54.1 million due to a decline in prepayment income and an elevated expense level. The Life Insurance segment reported an operating income of $33 million in the quarter under review, falling 47.6% year over year, due to run-rate impact stemming from the year-ago annual review of DAC and increased expenses.
American Equity Investment Life Holding Company reported second-quarter 2023 adjusted net earnings of $1.62 per share, which missed the Zacks Consensus Estimate by 1.8%. The bottom line remained unchanged year over year. Operating total revenues were $633.5 million, down 4.1% year over year due to lower premiums and other considerations and net investment income.
Premiums and other considerations decreased 34.3% year over year to $2.5 million. The figure was lower than our estimate of $5.9 million. Net investment income decreased 8.3% on a year-over-year basis to $542 million. The downside was due to a 6-basis point decline in the effective yield on the investment portfolio, lower invested assets and a decrease in cash and short-term investments at the holding company level. The investment spread was 2.57%, down from 2.64% in the year-ago quarter.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Manulife Financial (MFC) Q2 Earnings Top on Solid Asia Business
Manulife Financial Corporation (MFC - Free Report) delivered second-quarter 2023 core earnings of 62 cents per share, which beat the Zacks Consensus Estimate of 60 cents. The bottom line improved 1.6% year over year.
Core earnings of $1.2 billion (C$1.6 billion) increased 7.3% year over year. The improvement was driven by an increase in expected investment earnings related to higher investment yields and business growth, higher returns on surplus assets net of higher cost of debt financing and a smaller net charge in the provision for expected credit loss.
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 $435 million (C$585 million), up 10% year over year, attributable to higher sales volumes in Asia, Canada and the United States.
New business contractual service margin (CSM) of $441 million (C$592 million) rose 15% year over year.
Annualized premium equivalent (APE) sales increased 12% year over year to $1.2 billion (C$1.6 billion), attributable to higher sales in Asia.
Expense efficiency ratio increased 200 basis points (bps) to 45.1%.
Wealth and asset management assets under management and administration were $618.1 billion (C$819.6 billion), up 9.7% year over year. The Wealth and Asset Management business generated net outflows of $1.6 billion (C$2.2 billion), up 29.4%. This was due to lower net outflows at Retail.
Core return on equity, measuring the company’s profitability, expanded 40 bps year over year to 15.5%. Financial leverage ratio improved 20 basis points to 25.8% at quarter end.
Life Insurance Capital Adequacy Test ratio was 136% as of Jun 30, 2023, up from 131% as of Dec 31, 2022.
Adjusted book value per common share was $29.42, up 4.8% year over year.
Segmental Performance
Global Wealth and Asset Management division’s core earnings came in at $238 million (C$320 million), down 2.1% year over year.
Asia division’s core earnings totaled $352 million (C$473 million), up 5.1% year over year. NBV increased 3% year over year, driven by higher sales volumes, partially offset by the business mix.
APE sales increased 26%, driven by growth in Hong Kong and Asia other. New business CSM increased 26% year over year, driven by higher sales volumes and model refinements, partially offset by business mix
Manulife Financial’s Canada division core earnings of $277 million (C$372 million) were up 2.2% year over year. NBV increased 29%, driven by higher margins in all business lines largely due to product mix, partially offset by lower sales volumes in Annuities and Group Insurance.
APE sales decreased 11% due to usual variability in the group insurance market, with lower large-case sales, partially offset by higher mid-size business sales, as well as lower sales of segregated fund products. New business CSM increased 21% driven by product mix in Individual Insurance.
The U.S. division reported core earnings of $341 million (C$458 million), up 7% year over year. NBV increased 43% due to pricing actions, higher interest rates and product mix, partially offset by lower sales volumes.
APE sales decreased 15% due to the adverse impact of higher short-term interest rates on accumulation insurance products, particularly for its higher net worth customers. New business CSM decreased 17% due to lower sales volumes.
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
Voya Financial, Inc. (VOYA - Free Report) reported second-quarter 2023 adjusted operating earnings of $2.31 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 38.3% year over year on strong net underwriting results. Adjusted operating revenues amounted to $347 billion, which increased 43.4% year over year. The top line also beat the Zacks Consensus Estimate by 8.8%.
Net investment income declined 6.2% year over year to $545 million. Meanwhile, fee income of $474 million increased 14.8% year over year. Premiums totaled $677 million, up 13.4% from the year-ago quarter. Total benefits and expenses were $1.6 billion, up 17.2% from the year-ago quarter. As of Jun 30, 2023, VOYA’s assets under management, and assets under administration and advisement totaled $789 million.
Lincoln National Corporation (LNC - Free Report) reported second-quarter 2023 adjusted earnings of $2.02 per share, which outpaced the Zacks Consensus Estimate by 5.2%. However, the bottom line slipped 5.2% year over year. Adjusted operating revenues grew 5.7% year over year to $4,730 million. The top line beat the consensus mark by 2.8%. Total expenses plunged 48.8% year over year to $2,327 million in the quarter under review and remained below our estimate of $3,103.4 million due to the incidence of a significant MRB gain.
The Annuities segment recorded an operating income of $271 million, which decreased 8% year over year and missed the consensus estimate by 6.3%. The metric suffered from reduced prepayment income and increased expenses. Operating income in the Retirement Plan Services segment came in at $47 million, which plunged 14.5% year over year and missed our estimate of $54.1 million due to a decline in prepayment income and an elevated expense level. The Life Insurance segment reported an operating income of $33 million in the quarter under review, falling 47.6% year over year, due to run-rate impact stemming from the year-ago annual review of DAC and increased expenses.
American Equity Investment Life Holding Company reported second-quarter 2023 adjusted net earnings of $1.62 per share, which missed the Zacks Consensus Estimate by 1.8%. The bottom line remained unchanged year over year. Operating total revenues were $633.5 million, down 4.1% year over year due to lower premiums and other considerations and net investment income.
Premiums and other considerations decreased 34.3% year over year to $2.5 million. The figure was lower than our estimate of $5.9 million. Net investment income decreased 8.3% on a year-over-year basis to $542 million. The downside was due to a 6-basis point decline in the effective yield on the investment portfolio, lower invested assets and a decrease in cash and short-term investments at the holding company level. The investment spread was 2.57%, down from 2.64% in the year-ago quarter.