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Power Financial profit slips in fourth quarter

Jeffrey Orr, president and chief executive officer of Power Financial Corp.

Fernando Morales/The Globe and Mail

Power Financial Corp.'s performance slipped in the fourth quarter on lower profit at its mutual funds unit and flat earnings at insurance giant Great-West Lifeco Inc.

The Montreal-based conglomerate controlled by the Desmarais family posted net profit of $278-million, or 39 cents per share, down from $533-million, or 75 cents, in the year-earlier period.

Operating earnings in the fourth quarter were $406-million, or 57 cents, compared with $422-million, or 60 cents.

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The 39-cent share profit in the quarter fell below analysts' consensus estimate of 50 cents, and operating earnings of 57 cents were just shy of the 58-cent estimate.

Other items in the fourth quarter resulted in a net charge of $128-million, compared with a net contribution of $111-million in the corresponding quarter of 2011.

At mutual-fund unit IGM Financial Inc., operating earnings fell to $184-million, or 73 cents per share, compared with $196-million, or 76 cents.

Great-West posted operating earnings of $493-million, or 52 cents, compared with $500-million, or 53 cents.

Power Financial president and chief executive officer Jeffrey Orr warned at last year's annual meeting that the two main challenges for 2012 would be skittish equity markets and low interest rates that hobble returns on insurance products.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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