Sun Life shrugs off volatile equity markets to post higher-than-expected Q1 profit

Sun Life Financial Inc.’s (TSE:SLF, Mkt cap 27.16B, P/E 12.30, Div/yield 0.39/3.57, EPS 3.55, Shares 612.58M) first-quarter results showed no signs of the choppy equity markets and low interest rates that were present during the three-month period, with profit beating analyst expectations, the Wall Street Journal reports.

Canada’s third-largest insurance company by assets saw its net income increase 22% to $540 million or 88 Canadian cents per share in the January-to-March quarter. This time last year, Sun Life posted a figure of $441 million, or 72 Canadian cents per share.

If you factor out the impact of interest rates and equity markets, its underlying net income stood at $582 million, or 95 Canadian cents per share, compared to $516 million, or 84 Canadian cents a year earlier.

Analysts polled by Thomson Reuters were expecting a first-quarter profit of 90 Canadian cents a share, rather than the 95 Canadian cents a share posted.

“In a quarter characterized by volatile equity markets and low interest rates, we delivered earnings growth across all of our four pillars, generated a return on equity within our targeted range and announced a 4% increase in our common share dividend,” Chief Executive Dean Connor said.

Off the back of the earnings release, Sun Life hiked its quarterly dividend by 1.5 Canadian cents to 40.5 Canadian cents per share.

Sun Life’s minimum continuing capital and surplus requirements ratio, which illustrates whether the company has adequate capital to meet obligations to its policyholders, stood at 216% at the end of the first quarter.

While the figures for the first quarter point to a company moving in the right direction, it isn’t doing so with quite as much steam as Manulife Financial Corp. which posted a first-quarter profit that rose 45% from a year ago to $1.05 billion.

Sun Life Financial Inc. is a Toronto based financial services organization. Sun Life provides a range of protection and wealth products and services to individuals and corporate customers. The Company operates in five segments: Sun Life Financial Canada (SLF Canada), Sun Life Financial United States (SLF U.S.), MFS Investment Management (MFS), Sun Life Financial Asia (SLF Asia) and Corporate. The Company distributes its products through a variety of distribution channels, including direct sales agents, managing general agents, independent general agents, financial intermediaries, broker-dealers, banks, pension and benefits consultants and other third-party marketing organizations. The Company operates in Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. More from Reuters »

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