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Manulife Financial (MFC) Q4 Earnings: Is a Beat in Store?

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Manulife Financial Corporation (MFC - Free Report) is slated to report fourth-quarter 2018 results on Feb 13 after market close. The company delivered positive surprise for all the three reported quarters of 2018.

Factors in Q4

Manulife Financial is likely to benefit from solid Asian operations, expansion of its wealth and asset management business and cost-savings initiatives.

Asia contributes significantly to the company’s earnings. New business growth in Asia should thus support the company’s operations. The fourth quarter should benefit from Manulife’s expanded distribution network across the region as well as strengthening of strategically important distribution agreements with key partners in Japan and Indonesia.

Expansion of its wealth and asset management business likely helped generate positive net flows. Manulife Asset Management is expected to benefit from its compelling presence in North America and in Asia.

Strategic acquisitions should continue to drive operational results.

Manulife is focusing on lowering costs, aiming an expense efficiency ratio of less than 50% or $1 billion in cost savings and avoidance by 2022. The company’s significant cost savings are likely to aid margin expansion. Expense efficiency ratio is likely to improve on core earnings growth and lower core expense.

The Zacks Consensus Estimate of 50 cents for the to-be reported quarter indicates 8.7% year- over-year growth.

What Our Quantitative Model Says

Our proven model shows that Manulife Financial is likely to beat estimates in the to-be-reported quarter. This is because it has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Manulife Financial has an Earnings ESP of +3.03% as the Most Accurate Estimate of 51 is higher than the Zacks Consensus Estimate of 50 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Manulife Financial Corp Price and EPS Surprise

Zacks Rank: Manulife Financial carries a Zacks Rank #3 (Hold), which increases the predictive power of an Earnings ESP. This combined with Earnings ESP of +3.03% makes us confident of a positive surprise.

Zacks Rank #4 (Sell or 5 (Strong Sell) stocks should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks from the finance sector with the right combination of elements to surpass estimates this time around are as follows:

AerCap Holdings N.V. (AER - Free Report) is set to report fourth-quarter earnings on Feb 14. The company has an Earnings ESP of +1.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agree Realty Corp. (ADC - Free Report) has an Earnings ESP of +0.88% and a Zacks Rank of 3. The company is slated to announce fourth-quarter earnings on Feb 21.

American Tower Corp. (REIT) (AMT - Free Report) has an Earnings ESP of +0.29% and is a Zacks #3 Ranked player. The company is scheduled to release fourth-quarter earnings on Feb 27.

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