MONTREAL - Power Financial Corp. (TSX:PWF) saw fourth-quarter profit drop from a year earlier, falling below analyst estimates for the Montreal-based insurance and wealth management company.
The parent of Great-West Lifeco. (TSX:GWO) and IGM Financial (TSX:IGM), two of Canada's largest non-bank financial services companies, said its net income was $278 million or 39 cents per share in the latest period.
Power Financial's operating earnings were also down, falling to $406 million or 57 cents per share, reflecting decreases at its two main subsidiaries, partially offset by a slight gain from its investments in Pargesa, which has holdings in European energy, minerals and building materials companies.
The estimate had been for Power Financial to report 58 cents per share of operating income and 50 cents per share of net income.
A year earlier, Power Financial's net income was $533 million or 75 cents per share and operating earnings totalled $422 million or 60 cents per share.
Great-West Lifeco contributed $337 million to Power Financial's operating earnings in the fourth quarter, down from $342 million a year earlier.
IGM, which owns the Investors Group and Mackenzie mutual fund companies, contributed $106 million to Power's operating earnings, down from $113 million a year earlier.
Winnipeg-based Great-West, one of Canada's three biggest life insurance companies, recently agreed to pay $1.75 billion to acquire Irish Life Group from Ireland's government, with financial assistance from Power Financial and IGM.
On Tuesday, Power Financial said it had completed its purchase of $550.2 million worth of subscription receipts issued by Great-West Life, while IGM purchased a further $50.1 million. The receipts will be exchanged for GWO shares after the Irish Life purchase closes.
Power Financial is the main subsidiary of Power Corporation of Canada (TSX:POW), which also has media interests that include a stake in The Canadian Press news agency through its Gesca subsidiary.