Sun Life Financial Inc. beat analyst expectations in the first quarter, fueled by its asset management segment.
The Toronto-based insurance firm reported underlying earnings of $1.82 per share, better than the $1.71 predicted by analysts in a Bloomberg survey. Sun Life also raised its quarterly dividend to 88 Canadian cents from 84 cents.
“In an increasingly complex business environment, we continue to advance on our client impact strategy and strategic imperatives, underscored by new digital tools and capabilities, robust capital raising at SLC Management and strong sales and distribution in Asia,” Chief Executive Officer Kevin Strain said in a statement.
The company’s underlying net income grew by 19 per cent from a year earlier to $1.05 billion (US$754 million).
Sun Life posted “by far the biggest beat of the quarter across the lifeco peer group this earnings season,” Bank of Nova Scotia analyst Meny Grauman wrote to clients on Friday morning. But that result included elevated catch-up fees earned by the SLC Management segment, which don’t occur every quarter, he observed. Underlying net income for the overall asset management business was up 24 per cent from the prior year.
Sun Life’s US segment reported its underlying net income rose seven per cent from a year earlier, driven in part by improved dental claims. That’s a bounceback from the previous quarter, when the segment’s net income fell 39 per cent from a year earlier due to increased morbidity claims.
“After a string of earnings challenges, results here look to be getting back on track, which is an important positive for both SLF’s earnings power and sentiment on the name,” Grauman said.
Stephanie Hughes, Bloomberg News
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