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Why Is Manulife (MFC) Up 0.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Manulife Financial (MFC - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Manulife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Manulife Financial Q3 Earnings Beat on Solid Asia Business
Manulife Financial Corporation delivered third-quarter 2024 core earnings of 73 cents per share, which beat the Zacks Consensus Estimate by 4.3%. The bottom line improved 5.7% year over year. Core earnings of $1.3 billion (C$1.8 billion) remained unchanged year over year. The results reflected strong business growth led by Global WAM and Asia, and a lower net charge in the provision for Expected Credit Loss (ECL), more than offsetting the impacts of GMT and reinsurance transactions closed earlier this year.
New business value (NBV) in the reported quarter was $618 million (C$843 million), up 38.2% year over year, attributable to higher sales volumes in Asia and U.S. divisions. New business contractual service margin (“CSM”) of $556 million (C$759 million) rose 47% year over year.
Annualized premium equivalent (APE) sales increased 40% year over year, attributable to higher sales in Asia and the U.S. division. Wealth and asset management assets under management and administration were $705.8 billion (C$963 billion), up 17.2% year over year. The Wealth and Asset Management business generated net inflows of $3.8 billion (C$5.2 billion), up from net outflows of $0.8 billion in the year-ago quarter.
Core return on equity, measuring the company’s profitability, contracted 20 basis points year over year to 16.6%. Life Insurance Capital Adequacy Test ratio was 137% as of Sept. 30, 2024, which remained unchanged from Dec. 31, 2023. Adjusted book value per common share was $34.97, up 14% year over year.
Segmental Performance
Global Wealth and Asset Management’s core earnings came in at $365 million (C$499 million), up 35.6% year over year, driven by higher net fee income from favorable market impacts and positive net flows, favorable tax true-ups and benefits and continued expense discipline.
Asia division’s core earnings totaled $332 million (C$453 million), up 14% year over year, reflecting continued business growth momentum and benefits from updates to actuarial methods and assumptions in 2023 and 2024. Asia generated 64%, 45% and 55% year-over-year growth in APE sales, new business CSM and NBV, respectively, reflecting higher sales volumes in Hong Kong, mainland China, Singapore and Japan.
Manulife Financial’s Canada division core earnings of $302 million (C$412 million) were down 0.6% year over year. APE sales and NBV were down 20% and 7%, respectively, while new business CSM increased 86% due to strong individual insurance and segregated fund sales.
The U.S. division reported core earnings of $221 million (C$302 million), down 9.8% year over year. The decrease was primarily due to lower investment spreads, the impact from the previously completed reinsurance transaction and the annual review of actuarial methods and assumptions. It was partially offset by a lower charge in the ECL provision and more favorable claims experience in life.
APE sales, new business CSM and NBV were 23%, 30% and 36%, respectively, reflecting a rebound in demand from affluent customers for accumulation insurance products.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Manulife has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Manulife has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Manulife belongs to the Zacks Insurance - Life Insurance industry. Another stock from the same industry, Voya Financial (VOYA - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Voya reported revenues of $289 million in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $2.12 for the same period compares with $2.07 a year ago.
For the current quarter, Voya is expected to post earnings of $2.11 per share, indicating a change of +7.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Voya. Also, the stock has a VGM Score of C.
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Why Is Manulife (MFC) Up 0.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Manulife Financial (MFC - Free Report) . Shares have added about 0.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Manulife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Manulife Financial Q3 Earnings Beat on Solid Asia Business
Manulife Financial Corporation delivered third-quarter 2024 core earnings of 73 cents per share, which beat the Zacks Consensus Estimate by 4.3%. The bottom line improved 5.7% year over year. Core earnings of $1.3 billion (C$1.8 billion) remained unchanged year over year. The results reflected strong business growth led by Global WAM and Asia, and a lower net charge in the provision for Expected Credit Loss (ECL), more than offsetting the impacts of GMT and reinsurance transactions closed earlier this year.
New business value (NBV) in the reported quarter was $618 million (C$843 million), up 38.2% year over year, attributable to higher sales volumes in Asia and U.S. divisions. New business contractual service margin (“CSM”) of $556 million (C$759 million) rose 47% year over year.
Annualized premium equivalent (APE) sales increased 40% year over year, attributable to higher sales in Asia and the U.S. division. Wealth and asset management assets under management and administration were $705.8 billion (C$963 billion), up 17.2% year over year. The Wealth and Asset Management business generated net inflows of $3.8 billion (C$5.2 billion), up from net outflows of $0.8 billion in the year-ago quarter.
Core return on equity, measuring the company’s profitability, contracted 20 basis points year over year to 16.6%. Life Insurance Capital Adequacy Test ratio was 137% as of Sept. 30, 2024, which remained unchanged from Dec. 31, 2023. Adjusted book value per common share was $34.97, up 14% year over year.
Segmental Performance
Global Wealth and Asset Management’s core earnings came in at $365 million (C$499 million), up 35.6% year over year, driven by higher net fee income from favorable market impacts and positive net flows, favorable tax true-ups and benefits and continued expense discipline.
Asia division’s core earnings totaled $332 million (C$453 million), up 14% year over year, reflecting continued business growth momentum and benefits from updates to actuarial methods and assumptions in 2023 and 2024. Asia generated 64%, 45% and 55% year-over-year growth in APE sales, new business CSM and NBV, respectively, reflecting higher sales volumes in Hong Kong, mainland China, Singapore and Japan.
Manulife Financial’s Canada division core earnings of $302 million (C$412 million) were down 0.6% year over year. APE sales and NBV were down 20% and 7%, respectively, while new business CSM increased 86% due to strong individual insurance and segregated fund sales.
The U.S. division reported core earnings of $221 million (C$302 million), down 9.8% year over year. The decrease was primarily due to lower investment spreads, the impact from the previously completed reinsurance transaction and the annual review of actuarial methods and assumptions. It was partially offset by a lower charge in the ECL provision and more favorable claims experience in life.
APE sales, new business CSM and NBV were 23%, 30% and 36%, respectively, reflecting a rebound in demand from affluent customers for accumulation insurance products.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Manulife has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Manulife has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Manulife belongs to the Zacks Insurance - Life Insurance industry. Another stock from the same industry, Voya Financial (VOYA - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Voya reported revenues of $289 million in the last reported quarter, representing a year-over-year change of +2.9%. EPS of $2.12 for the same period compares with $2.07 a year ago.
For the current quarter, Voya is expected to post earnings of $2.11 per share, indicating a change of +7.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Voya. Also, the stock has a VGM Score of C.