Sun Life Financial Inc. managed a gain of almost 7% in first-quarter earnings, despite a heavy hit from the settlement involving Massachusetts Financial Services Co., its Boston-based mutual fund unit.

The Toronto-based insurer said net income for three months ended March 31 came in at $366 million or 61¢ a share vs $343 million or 56¢ a share a year ago.

That did not include the $59-million charge stemming from its settlement of the case against MFS brought by the Securities Exchange Commission. Including that charge, operating earnings were a record $425 million (71¢ a share), up 24% over last year.

The company said earnings at its Canadian operations jumped 33% over 2003, thanks to improved equity market performance, better credit experience and the completed integration of Clarica Life Insurance Co. operations.

Quarterly revenue was off 4% from a year ago — $5.54-billion vs $5.76. Return on equity in the first quarter was 10.3% vs 9.3% a year earlier. On an operating basis, return on equity in the latest quarter was 12%.

“Overall, we continue to make good progress towards success on the international financial services stage as we focus on growth and leveraging best practices throughout the organization,” Sun Life CEO Donald Stewart said in a release.

“Our Canadian business is an important contributor to that international vision,” he said. “We set out to create a market leader in Canada with the acquisition of Clarica and we have completed that task. In addition to delivering innovative products and services to our seven million Canadian customers, the solid platform in Canada provides the organization with the financial flexibility to enable us to grow and prosper internationally.”