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Enter core earnings. Manulife said two weeks ago it will begin using that measure to better reflect the strength of its business, and bring the company more in line with its international peers. “We’ve listened to the analysts and investors and what they want to understand is the underlying earnings capacity of the organization,” said Manulife chief executive officer Donald Guloien. Manulife chief financial officer Steve Roder said, “I wouldn’t be surprised if others follow us, but we were prepared to take the leap.”
Enter core earnings. Manulife said two weeks ago it will begin using that measure to better reflect the strength of its business, and bring the company more in line with its international peers. “We’ve listened to the analysts and investors and what they want to understand is the underlying earnings capacity of the organization,” said Manulife chief executive officer Donald Guloien. Manulife chief financial officer Steve Roder said, “I wouldn’t be surprised if others follow us, but we were prepared to take the leap.”
(MARK BLINCH/REUTERS)

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Manulife’s new math aims to clarify ‘underlying earnings’

Amid all the numbers a company reports each quarter, one matters most to investors – how much money was made or lost. So when Manulife Financial Corp. introduced a new profit measure called “core earnings” in its most recent third-quarter results, analysts and investors paid close attention.

Manulife was once noted for remarkably stable earnings. Investors could count on steady profits and few surprises from Canada’s largest insurance company. That changed in the financial crisis of 2008, when stock markets and interest plummeted, hurting Manulife’s ability to generate investment returns to pay for promises it made to customers. Manulife began posting wild swings in net income from quarter to quarter – from massive profits to deep losses. Shell-shocked investors started looking elsewhere for safe returns.