Sun Life Q4 Earnings Fall Year over Year on Lower Revenues

Sun Life Financial Inc. (SLF) reported fourth-quarter operating net income from continuing operations of $450 million (C$511 million), down 20.4% year over year.

Net premium revenue was $2.4 billion (C$2.7 billion), down 4.4% year over year.

Adjusted revenues (adjusted for premiums and deposits for the impact of constant currency adjustment, and reinsurance in SLF Canada's GB operations) came in at $5.4 billion (C$6.1 billion), down 1.1% year over year. The decrease was primarily due to lower net premium revenue from Group Retirement Services in SLF Canada, partially offset by a higher fee income in MFS.

Total company wealth sales were $26.3 billion (C$29.9 billion) in the reported quarter, down 10.2% year over year.

Total company life and health sales were $718.4 million (C$816 million), up 14.4% year over year.

For full-year 2014, operating net income from continuing operations was $1.7 billion (C$1.9 billion), down 1.2% year over year. Revenues of $22.7 billion (C$25.8 billion) were up 85.6% year over year. The increase was primarily driven by net gains from changes in FVTPL assets and liabilities and the currency impact from a weakening Canadian dollar.

Q4 Segment Results

SLF Canada reported operating income of $108.3 million (C$123 million), down 10.2% year over year,.

SLF U.S. operating net income was $146 million, down 55.2% year over year.

MFS Investment Management reported operating net income of $120.6 million (C$137 million), down 7.4% year over year.

SLF Asia reported operating income of $54.6 million (C$62.0 million), up 47.7% year over year.

Financial Update

Assets under management were up 15% in 2014 to $631.1 billion (C$734 billion) on currency, market movements and continued business growth.

Sun Life Assurance's MCCSR ratio was 217% as of Dec 31, 2014 compared with 219% as of Dec 31, 2013.

Sun Life Financial operating return on equity (ROE) declined to 12.6% in the quarter under review from operating ROE of 17.7% in the year-ago quarter.

Sun Life Financial presently carries a Zacks Rank #3 (Hold).

Performance of Other Insurance Stocks

Among other life insurance players, Prudential Financial Inc. (PRU) missed earnings estimates while Lincoln National Corporation (LNC) beat the same and Torchmark Corp. (TMK) reported in line.