NU Online News Service, July 29, 2003, 5:14 p.m. EDT – Sun Life Financial Inc., Toronto, is reporting the equivalent of $272 million in net income in U.S. currency for the second quarter on $4.1 billion in revenue, up from $47 million in net income on $3.8 billion in revenue for the second quarter of 2002.
In Canadian currency, Sun Life is reporting 366 million Canadian dollars in net income for the latest quarter on 5.6 billion Canadian dollars in revenue, compared with 71 million Canadian dollars in net income on 5.8 billion Canadian dollars in revenue for the second quarter of 2002.
Company executives note that the decline in the strength of the U.S. dollar hurt reported earnings.
In U.S. currency, earnings at the U.S. insurance unit shrank to $47 million on $1.9 billion in revenue, from $49 million on $2.1 billion in revenue, but the drop was much steeper when expressed in Canadian dollars.
Sun Life is showing that the U.S. insurance unit earned 61 million Canadian dollars on 2.6 billion Canadian dollars in revenue, down from 75 million Canadian dollars on 3.2 billion Canadian dollars in revenue.
Gross U.S. sales of variable annuities fell 12%, to $355 million in U.S. currency, and gross U.S. sales of fixed annuities fell 20%, to $273 million.
The spread between what Sun Life paid on fixed annuities and what it earned on its own investments was smaller during the latest quarter than it was during the second quarter of 2002, the company says.
“Management took action by introducing new fixed annuity products and lowering minimum interest rate guarantees,” Sun Life Chief Executive Donald Stewart says in a statement accompanying the company’s earnings release.
The conversions here use an exchange rate of $1=1.3475 Canadian dollars for the 2003 results, and an exchange rate of $1=1.519 Canadian dollars for the 2002 results. The exchange rates come from OANDA Corp., New York.