Sun Life Financial (SLF) Q3 Earnings Grow Y/Y, Dividend Up
Sun Life Financial Inc . SLF reported third-quarter 2017 underlying net income of $513 million (C$643 million), up 0.6% year over year.
Sun Life witnessed improved results at three of its segments.
Sun Life Financial Inc. Price, Consensus and EPS Surprise
Life and health sales decreased 9.4% year over year to $446 million (C$599 million), while wealth sales inched up 1.7% year over year to $28.6 million (C$35.8 billion) in the quarter.
Adjusted premiums and deposits were $33.7 billion (C$42.3 billion), up 3.4% year over year, fueled by higher managed and mutual fund sales.
Net premiums decreased 5.1% year over year to $2.9 billion (C$3.7 billion), attributable to lower premiums from Hong Kong in SLF Asia, Group Benefits in SLF U.S., GRS in SLF Canada and the currency impact from the change in the Canadian dollar. However, higher premiums for in-force management in SLF U.S. limited the downside.
SLF Canada 's underlying net income decreased 1.2% year over year to $177 million (C$222 million). The company witnessed lower investing activity gains on insurance contract liabilities and an unfavorable morbidity experience in Group Benefits. However, growth in fee income on wealth businesses and strong new business gains in GRS and individual insurance, plus an improved expense experience limited the downside.
SLF U.S. 's underlying net income was $129 million, up 25.2% from the year-ago quarter. The increase stemmed from improved morbidity experience in stop-loss and favorable mortality experience in the group life business.
SLF Asset Management 's underlying operating net income of $163 million (C$204 million), increased 8.5% year over year, driven by a solid performance at MFS Investment Management that in turn was fueled by higher average net assets.
SLF Asia reported underlying income of $71.8 million (C$90 million), up 12.5% year over year. Continued growth in fee income business and higher level of gains from investments drove this upside.
Global assets under management were $750 billion (C$934 billion), up 3.4% from the level at 2016-end. Sun Life Assurance's Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio was 252% as of Sep 30, 2017 compared with 248% as of Jun 30, 2017.
Sun Life reported operating return on equity of 16.2% in the third quarter of 2017, expanding 480 basis points year over year. Underlying ROE of 12.7% deteriorated 100 basis points year over year.
Leverage ratio of 22.5% at the quarter-end remained unchanged from the year-ago quarter-end.
The board of directors of Sun Life approved a 5% increase in dividend to 45.5 cents per share. The payment will be made on Dec 29, 2017 to shareholders of record on Nov 29, 2017.
Sun Life carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Performance of Other Life Insurers
Among other players from the life insurance industry that have reported third-quarter earnings so far, the bottom line of Lincoln National Corporation LNC , Torchmark Corporation TMK and Reinsurance Group of America, Incorporated RGA beat the respective Zacks Consensus Estimate.
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