Sun Life Financial Inc. (SLF), Canada’s third-largest insurer, said profit jumped 57 percent following two straight quarterly losses, helped by rising stock markets.
Net income in the first quarter climbed to C$686 million ($684 million), or C$1.15 a share, from C$438 million, or 73 cents, a year earlier, the Toronto-based insurer said today in a statement on its website. Excluding some items, profit was C$1.22 a share, topping the 69 cent-a-share average estimate of 12 analysts surveyed by Bloomberg News.
The insurer gained C$253 million from equity markets as Canada’s benchmark Standard & Poor’s/TSX Composite Index (SPTSX) climbed 3.7 percent in the first quarter and the MSCI World Index gained 11 percent. Insurers are affected by rising equities because they increase investment income.
“Don’t believe the hype,” John Aiken, a Barclays Capital analyst, wrote in a note in which he puts Sun Life’s earnings at 60 cents per share excluding certain items. “The strong reported numbers came on the back of the markets moving in their favor.”
Sun Life rose 1.9 percent to close at C$22.55 in Toronto. The firm’s shares gained 19 percent this year.
“Our results for the first quarter of 2012 reflect both solid underlying business performance and the impact of favorable equity markets and higher interest rates,” Chief Executive Officer Dean Connor said in the statement.
Connor, who took over the top job in December, set a goal to boost operating income to C$2 billion by 2015 by expanding market share in the U.S. and increasing operations in Asia.
Profit in Canada slipped 3.8 percent to C$227 million, while U.S. earnings more than doubled to C$434 million. Earnings from the MFS Investment Management unit climbed 17 percent to C$49 million, and Asian profit dropped 34 percent to C$29 million.
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