Wednesday, February 08, 2006

Sun Life Reports a Day Early to Prevent Leak

Rita Trichur, Canadian Press, 8 February 2006

Sun Life Financial Inc.'s fourth-quarter profit increased more than nine per cent to $478 million, the company reported Wednesday - a day early than scheduled after "human error" left the company vulnerable to a possible leak.

Sun Life Financial said it reported its quarterly and year-end results early as "certain financial information may have been inadvertently put into the public domain."

The problem centred around the company's quarterly statistical supplement, which is regularly provided to the analyst community in advance of earnings but with the latest quarterly results blanked out. In doing so, the spreadsheet is converted into a PDF file.

"This morning it came to our attention, that if you knew what you were doing in the Acrobat software, you could actually go and retrieve the otherwise blanked out information," said Tom Reid, vice-president of public relations.

"Acting with an abundance of caution, we determined that we would release the results today as opposed to tomorrow."

Quarterly earnings amounted to 82 cents per share, compared with $438 million or 74 cents a share a year earlier.

Revenue for the period ended Dec. 31, 2005 grew to $5.34 billion, up slightly from $5.26 billion in the comparable period.

The Toronto-based firm said strong earnings in its Sun Life Financial businesses in Canada, the U.S. and the U.K. were offset by losses in its reinsurance business "due to reserve strengthening and poor mortality experience as well as lower earnings in SLF Asia."

The stronger Canadian dollar also offset earnings by $13 million and integration expenses related to the company's acquisition of CMG Asia Ltd. and CommServe Financial Ltd. reduced earnings by $12 million, the firm added.

Robert Wessel, an analyst with National Bank Financial, said "it looked like a good quarter but, you know, I'd like to hear what they have to say on the conference call."

That call is scheduled for Thursday at 4 p.m. ET.

Net income for 2005 rose to $1.84 billion or $3.14 per share, from $1.68 billion or $2.81 per share in 2004, the company reported. Annual revenue grew to $21.9 billion from $21.7 in 2004.

"2005 was an impressive year for the company both financially and operationally," CEO Donald Stewart said in a release.

"We have again delivered on our key financial objectives. ... We also exceeded our share buyback objective of $500 million by over $50 million," CFO Paul Derksen added.

With total assets under management of $387 billion, Sun Life Financial and its partners operate in Canada, the U.S., the U.K., Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda.