Power's Q2 Earnings Look Weak-But Is a 31% NAV Jump Real Operating Power or Fancy Accounting?

Power's Q2 printed lower earnings, but adjusted NAV jumped sharply

Power's second quarter looked softer on the headline number. Second-quarter net earnings were $1.10 per share, down from $1.20 per share a year earlier. At the same time, adjusted net asset value per share was $112.94 at June 30, 2026, compared with $85.77 at December 31, 2025, representing an increase of 31.7%.

That contrast is the story. The income statement looked weaker, while the adjusted net asset value figure improved much more sharply.

The timing also keeps the quarter relevant. Power issued the results on July 30, 2026, and a replay of the call became available from July 31, 2026. That gave investors a fresh look at management's explanation soon after the release.

The basic debate is straightforward: - Bulls will argue one softer earnings print should not overshadow a much stronger asset-value reading. - Bears will argue that a higher NAV figure does not by itself create near-term cash flow.

Major holdings strengthened at the same time, but NAV still needs careful reading

Power said the increase in adjusted net asset value per share was primarily driven by the publicly traded operating companies. That makes the quarter more interesting than a simple earnings miss suggests. At the same time, investors still need to separate stronger subsidiary performance from valuation updates and consolidation effects.

Great West showed sustained returns

Great West stands out because it reported both scale and returns. Power said Great West reported adjusted return on equity (ROE) [5] exceeding 19% for the second consecutive quarter. The company also reported adjusted net earnings of $1,270 million.

That combination matters. A single strong quarter can be noisy; two quarters of high returns are harder to dismiss. The key question is whether that performance continues, because consistent returns are a better sign of a durable operating engine than a one-off valuation move.

IGM's record earnings support the operating case

IGM reported record adjusted net earnings of $330.0 million while overseeing $343.3 billion in assets under management and advisement. That supports the view that at least part of Power's group strength came from businesses where fees and client activity show up fairly directly in results.

The upside case is clear: diversified wealth and asset-management platforms can benefit from larger client balances, better scale, and pricing power. The caution is also simple: market strength can lift fees without proving that management has built a deeper long-term moat.

Wealthsimple and Sagard show why valuation changes matter

Wealthsimple and Sagard are less about current earnings power and more about valuation changes. Wealthsimple's stake was valued at $4.7 billion, up 15% in the quarter. Sagard showed an 11% fair-value increase, along with Unigestion integration.

Those moves help explain the jump in adjusted NAV. They also show why the metric can rise faster than reported earnings. A revaluation can reflect real business momentum, but it can also change from quarter to quarter as assumptions or market conditions shift.

Why non-IFRS NAV still needs scrutiny

Investors should not treat adjusted NAV as if it were a standard accounting measure. Power's own materials say non-IFRS measures like adjusted net asset value do not have a standard meaning and may not be comparable to similar measures used by other entities.

That does not make the figure meaningless. It means investors should check whether the increase is coming from: - subsidiaries that are genuinely earning more, - fair-value or market-based updates, - changes in consolidation or portfolio structure.

For a shareholder-owned company, the best outcome is not just a higher book value. It is book-value growth that is eventually supported by stronger earnings and more cash that can be distributed.

What matters next for Power shareholders

The quarter may have looked soft at first glance, but the move in adjusted net asset value per share keeps POW worth watching. With the next quarterly read the obvious next catalyst, the practical question is whether POW remains the best way to own these assets, or whether the listed pieces are becoming easier to own on their own.

Signals to watch

• Affiliate performance: If listed subsidiaries keep improving on their own, direct ownership may start to look more attractive than the parent wrapper.
• NAV quality: The next step is to see how much of the 31.7% increase repeats, and whether it is backed by earnings rather than mainly by valuation marks.
• Group complexity: If the portfolio keeps getting cleaner while reported consolidated numbers stay hard to read, investors may continue to value the pieces more directly than the whole.