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Manulife profit slides 51% as low oil hits North America units

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(Bloomberg) – Manulife Financial Corp., Canada’s largest insurer, said fourth-quarter profit slid 51 percent as oil and gas investments languished amid a global decline.

Net income fell to C$640 million ($510 million), or 33 cents a share, from C$1.3 billion, or 68 cents, a year earlier, the company said today in a statement. Profit excluding some items was 36 cents a share, missing the 41-cent average estimate of 15 analysts surveyed by Bloomberg.

“Core earnings, due to a variety of experience factors, were below our plan,” Chief Executive Officer Donald Guloien, 57, said in the statement. “Also, the macro environment, including low interest rates, produces headwinds for 2015.”

The insurer is among financial firms grappling with a world of low interest rates and plunging oil. The commodity has declined about 50 percent since June and Manulife has about $1.8 billion in oil and gas equity holdings through its NAL Resources Management Ltd., according to Bank of Montreal.

The U.S. division’s profit slid 39 percent to C$506 million from C$825 million last year on losses on private equity oil and gas holdings.


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