Manulife surpasses Q4 expectations, announces share buybacks and a dividend hike, boosting investor confidence
Manulife Financial Corp. shares experienced their largest intraday gain in a year after the company exceeded expectations in the fourth quarter, concluding a year of strong financial performance.
In a report by Financial Post, The Toronto-based insurance firm reported core earnings of $1.03 per share for the quarter, surpassing the 94 Canadian cents projected by analysts in a Bloomberg survey.
According to the company’s financial report, Manulife’s full-year core earnings reached $7.2bn, an 8 percent increase from 2023.
The firm also announced a 10 percent increase in its quarterly dividend to 44 Canadian cents per share and plans to repurchase approximately 52 million shares, representing 3 percent of shares outstanding.
The shares climbed as much as 8.5 percent to $45.93 during morning trading in Toronto.
Manulife’s earnings growth was driven by its Asia and global wealth asset management segments, both of which posted double-digit increases compared to the previous year.
Meny Grauman, an analyst with the Bank of Nova Scotia, stated in a client note that the performance “blew past our expectations, and help build our confidence that Manulife can meet its new medium-term objectives.”
The company completed three reinsurance deals in 2024, including an agreement with Reinsurance Group of America (RGA) covering $5.4bn in reserves.
Chief Financial Officer Colin Simpson stated that these transactions aimed to validate Manulife’s reserves for investors.
“We felt like long-term care acts as an overhang on our investor story,” Simpson said in an interview. “And so, we felt investors didn’t have the visibility that we did on our reserve.”
Manulife also addressed potential risks from US trade policy.
Simpson commented that former US President Donald Trump’s threat to impose tariffs on Canadian imports was unlikely to impact the company significantly, given its limited cross-border business exposure.
Chief Executive Officer Roy Gori, who has led Manulife since October 2017, is set to retire in May. He will be succeeded by Phil Witherington, the current head of the company’s Asia division.
