Business and Finance

Global insurance and financial services company Sun Life Financial Inc. says its first-quarter profit rose 7 per cent to $533 million, despite a plunge in revenues, as increased strength in its United States business helped offset a strong Canadian dollar and capital-market turbulence.

But earnings reported yesterday missed analysts’ estimates, and top executives at the company warned that the headwinds dragging on net income could hold Sun Life to as little as zero growth in 2008.

"I’m never happy with any business that’s not either growing sales strongly or making a lot of money, so I’m just not a happy guy, period, and I’m looking for us to do better on both top and bottom line going forward," chief executive Donald Stewart said during a conference call with analysts.

The company had aimed to grow operating earnings per share 10 per cent and assets under management 15 per cent. But those targets are now in question, the company said.

Total revenue fell nearly a third to $3.9 billion from a year-before $5.6 billion, after accounting for currency valuations low fee cash advance cashadvance.com. Adjusted revenue, excluding currency changes, was $6 billion, compared with $5.8 billion.

Assets under management fell to $415.3 billion at quarter end from $451.3 billion a year earlier, including a $36.5 billion drag from the strengthening of the loonie relative to foreign currencies.

The Toronto-based firm’s profit amounted to 93 cents per share, up from $497 million, or 86 cents per share, in the first three months of last year. Analysts polled by Thomson Financial had expected earnings of $1 per share.

Return on equity rose to 13.4 per cent from 12 per cent.

Equity markets, hammered by the uncertainties spawned by the collapse of the U.S. subprime-mortgage market, were a drag on earnings.

The Canadian Press

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