Financial stock to watch: Manulife Financial Corporation (USA) (NYSE: MFC)

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Manulife Financial Corporation (USA) (NYSE: MFC) stock rose 1.3% on 9 Aug,(as of 12:38 PM GMT-4; Source: google finance) after the company beat the earnings estimate for the second quarter 2018. For the second quarter 2018, the company has reported net income attributed to shareholders of $1,262 million and return on common shareholders’ equity of 12.3%, compared with $1,255 million and 12.4%, respectively, for the second quarter of 2017. The growth in net income attributed to shareholders primarily reflects growth in core earnings and improvement in the direct impact of markets, mostly offset by lower investment-related experience gains outside of core earnings and a restructuring charge. Manulife Financial Corp reported the core earnings of $1.43 billion, for the second quarter, compared with $1.17 billion, the year before. Net income at its Asian business rose to $145 million from $123 million a year ago.

Moreover, during the second quarter the company has made additional progress improving the capital efficiency of the legacy businesses and freed up $400 million in capital. During this period, the company has also expanded the distribution reach in Asia by signing a new exclusive bancassurance agreement in Cambodia, and in Canada the company has became the first life insurer to underwrite using artificial intelligence, which improves efficiency and shortens customer response times.

MFC in the second quarter of FY 18 has reported the adjusted earnings per share of 70 cents, beating the analysts’ estimates for the adjusted earnings per share of 65 cents.

MFC has declared a quarterly dividend in the amount of 22 cents per Manulife common share, payable on and after September 19, 2018 to shareholders of record at the close of business on August 21, 2018

Additionally, during the second quarter 2018, the company has recorded a $200 million post-tax restructuring charge ($250 million pre-tax) ,related to actions that are expected to result in annual run-rate savings of $300 million pre-tax when fully implemented, with the vast majority of the run-rate savings to be achieved by the end of 2019. The charge primarily is related to the voluntary exit program in the company’s Canadian operation transformation program and to the North American voluntary early retirement program as well as costs to optimize the real estate footprint in the U.S. and Canada.

In addition, the company expects a third quarter of 2018 post-tax charge of up to $100 million for the annual review of actuarial methods and assumptions

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