Sun Life Financial Inc. (SLF, SLF.TO) reported Thursday a narrower loss for the third quarter, reflecting a significant increase in revenues in its U.S and Canadian operations. The company noted that earnings for the third quarter were negatively impacted by previously announced actuarial assumption updates as well as credit markets.
The company's net loss for the third quarter attributable to common shareholders narrowed to C$140 million or C$0.25 per share from C$396 million or C$0.71 per share in the previous year.
According to the company, the results for the quarter were impacted by the implementation of equity- and interest rate-related actuarial assumption updates of C$513 million and reserve increases of C$194 million for downgrades on the company's investment portfolio, which were partially offset by reserve releases of C$161 million resulted from favorable equity markets. The implementation of equity- and interest rate-related actuarial assumption updates was due to the review and update of the equity and interest rate assumptions used to value its variable annuity, segregated fund and certain fixed annuity and individual life liabilities in the third quarter. The company said its overall reported net loss for the recent quarter increased by C$23 million as a result of the weakening of the Canadian dollar, compared to the prior-year quarter. In its second quarter, the company had reported net income of C$591 million, compared to net income of C$519 million in the same period last year. Earnings per share for the second quarter was C$1.05 compared to earnings per share of C$0.91 in the second quarter of 2008. Revenues for the third quarter surged to C$8.83 billion from C$2.56 billion in the earlier year. Revenues for the second quarter were C$8.72 billion, up from C$4.41 billion in the year ago quarter. The company reports its results in five business segments : Sun Life Financial Canada or SLF Canada, Sun Life Financial U.S or SLF U.S, MFS Investment Management or MFS, Sun Life Financial Asia or SLF Asia and Corporate. According to the company, Corporate segment includes the results of Sun Life Financial U.K or SLF U.K and Corporate Support, which includes the company's reinsurance businesses as well as investment income, expenses, capital and other items not allocated to Sun Life Financial's other business segments. SLF Canada revenues increased to C$3.39 billion from C$1.28 billion in the previous year. SLF U.S generated revenues of C$3.64 billion, up from C$546 million in the prior year. MFS Investment Management revenues decreased to C$322 million from C$342 million a year ago. Revenues from SLF Asia increased to C$588 million from C$180 million in the preceding year. Corporate posted revenues of C$890 million, compared to C$213 million last year. SLF Canada's net income for the quarter increased to C$219 million from C$157 million in the same quarter last year. SLF U.S net loss narrowed to C$413 million from last year's C$533 million. MFS Investment Management reported net income of C$43 million for the quarter, compared to earnings of C$49 million in the preceding year. SLF Asia reported third quarter earnings of C$13 million, in comparison with a net loss of C$8 million in the third quarter of 2008. The Corporate reported a loss of C$2 million, compared to a net loss of C$61 million in the earlier year. For the nine-month period, common shareholders' net income decreased to C$238 million from C$656 million in the previous year. Earnings per share for the period was C$0.42, compared to a loss of C$1.14 per share in the same period last year. Revenues for the period surged to C$22.58 billion from C$10.86 billion in the prior-year period.
Looking ahead, the company estimates normalized earnings for fiscal 2010 to be in the range of C$1.4 billion to C$1.7 billion. Donald Stewart, chief executive officer said, "Our Canadian business reflects a strong brand and distribution, our U.S. business continues to benefit from enhanced distribution and strong annuity sales, and we are well positioned in our international markets."
Separately, Sun Life Financial announced a quarterly shareholder dividend of C$0.36 per share, to shareholders of record on November 25, 2009, payable on December 31. SLF closed Wednesday's regular trading at $28.18 on the NYSE, while SLF.TO ended at C$30.11.
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