Manulife Financial Corp. (MFC) reported its second-quarter 2012 operating loss of $293 million (C$300) million or (C$18) cents per share, compared with the income of $479 million (C$490) million or (C$26) cents per share in the prior-year quarter. The disappointing results came on the back of a volatile equity market and a weak interest rate environment.
The net income excluding notable items was $538.7 million (C$551) million compared with $657.9 million (C$673) million in the second quarter of 2011.
During the quarter, total insurance sales went up 60% year over year to $978.6 million (C$1001 million), led by higher sales from Japan, Hong Kong and Indonesia.
The company’s wealth sales, however, declined 7% year over year to $8.4 billion (C$8.6 billion) due to a fall in mutual funds sales in both U.S and Canada regions, partly offset by higher wealth sales from the Asia division.
Premium and deposit for the insurance products were $6.2 billion (C$6.3 billion), up 16% year over year. The same for the wealth products were $11.0 billion (C$11.2 billion), down 3% year over year.
Total funds under management as of June 30, 2012, were $502 billion (C$514 billion), up 7% year over year, as a result of increased fee income.
Assets managed by Manulife Asset Management grew 4.7% year over year to ($183 billion) C$187.0 billion, and including assets managed for Manulife's general account, total assets under management increased 6.3% year over year to $217.1 billion (C$222.1) billion as on June 30, 2012.
The Manufacturers Life Insurance Company’s consolidated regulatory capital ratio or Minimum Continuing Capital and Surplus Requirements (“MCCSR”) was 213% as of June 30, 2012, reflecting a decline from 225% as of March 31, 2012.
Manulife currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. Considering the fundamentals, we are maintaining our long-term Neutral recommendation on the shares.
Headquartered in Toronto, Canada, Manulife Financial operates as a life insurance company and offers reinsurance services. The company functions as Manulife Financial in Canada and Asia, and primarily as John Hancock in the United States. MetLife Inc. (MET) is one of its biggest competitors.
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