Will Q1 Earnings Hold A Surprise For Sun Life (SLF) Stock?
Zacks Investment Research | May 09, 2016 06:56AM ET
Sun Life Financial Inc. (TO:SLF) is set to report first-quarter 2016 results on May 10, after the market closes. Last quarter, the company posted a positive earnings surprise of 15.87%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Sun Life has likely to have experienced better results in its U.S. and Asia businesses owing to stronger economic growth in such markets. Also, a stronger U.S. dollar compared with the Canadian dollar is expected to have supported the company’s earnings.
Moreover, the overall sales of individual insurance products in Asia might have witnessed an increase, thereby reflecting currency higher agency sales in most markets and strong growth in health and accident sales.
In addition, the company has likely experienced a rise in its Global Asset Management Business, which is expected to have led to an increased asset base in the to-be-reported quarter. Growth in the asset management business should boost the company’s earnings.
Prudent acquisitions and strategic investments should also have aided the upside.
However, exposure to low interest rates has likely weighed on the company’s investment results.
Further, Sun Life has likely faced market volatility, which in turn, has led the company to employ hedging costs. Such hedging costs are expected to exert pressure on the company’s earnings.
With respect to the surprise trend, the company delivered positive surprises in all of the last four quarters, with an average beat of 11.35%.
Earnings Whispers
Our proven model does not conclusively show that Sun Life is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Zacks Investment Research
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