Manulife Financial Corp. (MFC) said Thursday that it's ahead of plan in reducing its earnings sensitivity to equity markets and interest rates, but it was those favorable markets and higher rates that led it to post a record profit in the fourth quarter.
The results, which came after two consecutive quarterly losses, nonetheless fell short of expectations.
Overall, Canada's life insurers were expected to post one of their strongest quarters since the 2008 financial crisis, reflecting rising equities and bond yields. And of the four biggest life insurers, Manulife was expected to benefit the most.
Manulife said net income attributed to shareholders was C$1.794 billion or C$1 a share in the quarter, compared with C$868 million or 51 Canadian cents a year earlier.
The Thomson Reuters mean estimate was for a profit of C$1.09 a share in the latest period.
Toronto-based Manulife had posted hefty losses in the second and third quarters on slumping stock markets and falling rates. The company has more earnings sensitivity to interest-rate and equity-market volatility than its domestic rivals because it has sold more long-term guaranteed product.
In Toronto, Manulife is off 6.4% to C$17.71.
The company also said it's close to achieving its year-end 2012 hedging objectives and believes that its previously stated 2015 net income objective of C$4 billion "continues to be attainable and appropriate."
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