UPDATE 1-Power Financial quarterly profit rises 12 pct

(Adds details on operating earnings, revenues, expenses)

TORONTO, March 13 (Reuters) - Power Financial Corp (PWF.TO: Quote, Profile, Research) posted a 12 percent rise in fourth-quarter earnings on Thursday as a result of higher operating earnings and one-time items.

The Canadian financial services company, which owns the country's second biggest life insurer and largest mutual fund company, reported net income of C$532 million ($543 million), or 72 Canadian cents a diluted share, for the three months ended Dec. 31.

That compared with C$474 million, or 64 Canadian cents a share, in the same period a year ago.

Operating earnings rose a more modest 6 percent to C$500 million, or 68 Canadian cents a share, the company said.

Analysts had expected Montreal-based Power Financial, which owns majority stakes in insurer Great West Lifeco Inc (GWO.TO: Quote, Profile, Research) and mutual fund firm IGM Financial Inc (IGM.TO: Quote, Profile, Research), to earn 70 Canadian cents a share in the quarter, according to Reuters Estimates. Power Financial also owns half of Parjointco N.V., which in turn controls Swiss holding company Pargesa (PARG.S: Quote, Profile, Research).

Total revenues at Power Financial rose to C$9.4 billion in the quarter from C$8.6 billion a year earlier, helped by an increase in the fair value of held-for-trading assets. Expenses rose to C$8.5 billion from C$7.8 billion.

RBC Capital Markets analyst Andre-Philippe Hardy this week upgraded Power Financial's stock to "outperform" from "sector perform" after a 13 percent drop in its share price in the past five weeks.

Hardy said the stock's discount to the net asset value of its underlying assets had widened considerably.