Power Financial Corp. (TSX:PWF) improved its profits in the third quarter as lower charges on its books helped boost the bottom line despite a $600-million drop in revenue.
Power Financial, owner of some of Canada’s largest financial services companies, said Friday that third-quarter net earnings attributable to shareholders were $312 million, or 44 cents a diluted share in the third quarter ended Sept. 30.
That compared with net profits of $294 million or 41 cents a share last year.
Revenues dropped to $9.1 billion from $9.7 billion.
In the latest quarter, Power Financial took $28 million less in charges on its books — $116 million compared with $144 million a year earlier.
In addition, operating units Great-West Lifeco Inc. and Power’s Pargesa investment company in Europe produced lower earnings.
For Power Financial, operating profits were $454 million or 60 cents per share, compared with $465 million or 62 cents in the third quarter of 2010.
On a segmented basis, the contribution of subsidiary Great-West (TSX:GWO) to Power’s operating earnings dropped to $312 million from $323 million.
The contribution by mutual fund giant IGM Financial Inc. (TSX:IGM) — which owns Investors Group and Mackenzie Financial — was $121 million compared with $104 million.
Meanwhile, Pargesa, which reports its results in Swiss francs but has European investments, contributed $36 million, down from $59 million. That reflected the weakening of the euro against the Swiss franc.
Power Financial is part of the Power Corp. (TSX:POW) group of companies controlled by the Montreal-based Desmarais family.
The holding company earned $190 million or 41 cents per share, compared to $169 million or 37 cents a year earlier.
Total revenues decreased 5.8% to $9.2 billion, including $4.4 billion from net premiums. The decrease was attributable to a 9.8% drop to $1.36 billion in regular net investment income.
Operating earnings increased nearly 28% to $348 million from $275 million in the year-ago period.
On the Toronto Stock Exchange, Power Financial shares closed up 61 cents, or 2.4%, to $26.11 in Friday trading. Power Corp. shares gained 32 cents to $23.93.