Sun Life Q1 Earnings Miss Estimates, Revenues Top, Dividend Raised

Sun Life Financial Inc. SLF delivered first-quarter 2025 underlying net income of $1.27 per share, which missed the Zacks Consensus Estimate by 4%. However, the bottom line increased 14.4% year over year. Underlying net income was $727 million (C$1 billion), which increased 13% year over year, given by solid results in asset management & wealth, group-health & protection, individual-protection, corporate expenses and other.

Revenues of $7.9 billion increased 55% year over year and beat the Zacks Consensus Estimate by 22.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The quarterly results reflected solid results across all the segments.

Asset management gross flows & wealth sales of $43.3 billion (C$62.2 billion) increased 25.5% year over year. Group - Health & Protection sales of $404 million (C$580 million) improved 4.1% year over year. Individual - Protection sales of $608 million (C$874 million) jumped 9.3% year over year.

Sun Life Financial Inc. Price, Consensus and EPS Surprise

Sun Life Financial Inc. price-consensus-eps-surprise-chart | Sun Life Financial Inc. Quote

New business contractual service margin (CSM) was $282 million (C$406 million), up 10.5% year over year.

Segment Results of SLF

SLF Canada’s underlying net income increased 14.4% year over year to $261 million (C$376 million). Canada witnessed solid results at Wealth & Asset Management, Group - Health & Protection and Individual - Protection.

Asset management gross flows & Wealth sales of $4.5 billion ($6.5 billion) climbed 25% year over year. Group - Health & Protection and Individual - Protection sales also increased year over year.

SLF U.S.’ underlying net income was $151 million, which increased 7% year over year, reflecting solid results at Individual – Protection and Group - Health & Protection.

U.S. group sales of $123 million declined 13%, reflecting lower Medicaid sales in Dental and lower employee benefits sales in Group Benefits.

SLF Asset Management reported underlying net income of $244 million (C$351 million), which increased 17.8% year over year, attributable to stable results in MFS and SLC Management. Asset Management exited the reported quarter with $0.7 trillion (C$1.12 trillion) of AUM, comprising $604 billion in MFS and $177 billion (C$255 billion) in SLC Management.

SLF Asia reported underlying net income of $137 million (C$197 million), which grew 5.3% year over year, driven by solid results at Asset management & Wealth and Individual - Protection.

Individual sales of $512 million (C$735 million) grew 11% year over year. Asset management gross flows & wealth sales of $2.1 billion ($3.1 billion) increased 40% year over year. New business CSM of $190 million (C$273million) increased 12.4% year over year, primarily driven by strong profit margin in Hong Kong.

Financial Update  

As of March 31, 2025, Global assets under management were $1.07 trillion (C$1.55 trillion).

Sun Life’s Life Insurance Capital Adequacy Test (LICAT) ratio was 141% as of March 31, 2025, down 100 basis points (bps) year over year.

The LICAT ratio for Sun Life (including cash and other liquid assets) was 149%, which expanded 100 basis points year over year.

Sun Life’s return on equity was 15.7% in the first quarter of 2025, which expanded 70 bps year over year. The underlying return on equity of 17.7% expanded 170 bps year over year. The leverage ratio of 20.1% remains unchanged from 2024 end.

Dividend Update of Sun Life

The company’s board of directors approved a 4.7% hike in its quarterly dividend to 88 cents per share. The amount will be paid out on June 30, 2025, to shareholders of record at the close of business on May 28.

Zacks Rank

Sun Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Reinsurance Group of America, Incorporated RGA reported first-quarter 2025 adjusted operating earnings of $5.66 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line decreased 6% from the year-ago quarter’s figure. Net foreign currency fluctuations had a favorable effect of 9 cents per share on adjusted operating income. 

RGA's operating revenues of $5.3 billion missed the Zacks Consensus Estimate by 7%. The top line declined 13.7% year over year due to higher net premiums and net investment income. Net premiums of $4 billion rose 23.9% year over year. Investment income increased 13% from the prior-year quarter to $1.2 billion on higher average invested assets. Average investment yield decreased to 4.64% from 4.7% in the year-ago period, reflecting lower variable investment income and lower yield on cash and cash equivalents, partially offset by higher new money rates.

Voya Financial, Inc. VOYA reported first-quarter 2025 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 35.2%. The bottom line increased 14.4% year over year.Total revenues amounted to nearly $2 billion, which decreased 4% year over year.

Net investment income increased 5.9% year over year to $560 million. Meanwhile, fee income of $570 million increased 11.1% year over year.  Premiums totaled $737 million, down 7.9% from the year-ago quarter. Total benefits and expenses were $1.8 billion, up 1.8% from the year-ago quarter. As of March 31, 2025, VOYA’s total client assets were $694 billion, up 21% year over year, primarily due to assets onboarded from OneAmerica, positive capital markets and significant recordkeeping wins.

Manulife Financial Corporation MFC delivered first-quarter 2025 core earnings of 69 cents per share, which missed the Zacks Consensus Estimate by 1.4%. The bottom line decreased 1.4% year over year. Core earnings of $1.2 billion (C$1.8 billion) declined 7.6% year over year. Core earnings decreased modestly, as continued business growth in Global WAM and Asia was offset by strengthened provisions related to expected credit loss of $45 million post-tax in the first quarter of 2025, and a provision for the California wildfires of $43 million post-tax in the first quarter of 2025.

New business value (NBV) in the reported quarter was $631.6 million (C$907 million), up 29.4% year over year. Annualized premium equivalent (APE) sales increased 28.5% year over year to $1.8 billion (C$2.7 billion). New business contractual service margin (CSM) increased 31.4% year over year to $631 million (C$907 million). The Global Wealth and Asset Management business generated net inflows of $0.3 billion (C$0.5 billion), which plunged 93.8% year over year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research