Sun Life Financial, chartered in 1865, is an international financial services company that offers a wide range of financial products and services for individuals and corporations. These include retirement savings products, life and health insurance products, trust services and investment funds and mortgages.
Sun Life’s Q2 profits hit by weak equity markets, low interest rates
Sun Life Financial Inc.’s (TSE:SLF) second-quarter earnings were clobbered due to weak equity markets and declining interest rates, though sales went up 17 per cent.
Net income slumped to $51 million, or nine cents per share, compared with a $408 million profit, or 68 cents per share, a year-ago. Revenue came in at $6.05 billion, up from $5.15 billion.
Analysts polled by Bloomberg expected a per-share profit of 30 cents, on $4.5 billion in revenue for the quarter ended June 30.
“Sun Life's overall business and financial operations are affected by the global economic and capital market environment,” the company said in a statement.
“Our results are sensitive to interest rates, which have declined in response to more challenging conditions in the European Union and monetary policy actions in the United States.”
If current rates persist, the company said net income for the 2013 to 2015 period could be reduced to about $600 million.
“Although declining interest rates and weak equity markets in the second quarter adversely impacted financial results, we continued to make progress in executing on the four pillars of our growth strategy,” Sun Life chief executive Dean Connor said.
Premiums and deposits were $25.2 billion for the quarter ended June 30, 2012, compared with $20.9 billion for the same period last year.
Net premium revenue slipped to $1.9 billion from $2.2 billion. The decline stemmed from lower annuity premiums in both Sun Life’s U.S. and Canadian group retirement services.
Assets under management came in at $496 billion, up from the $473 billion in second quarter a year previously.
The company’s board also declared a quarterly dividend of 36 cents per share, which will be paid out to shareholders on Shares, in mid-afternoon trade Thursday, fell 22 cents, or 1.01 per cent declining to $21.55 each on the Toronto Stock Exchange.