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UPDATE 2-Canada's Manulife reports decline in 4th-quarter earnings

* Q4 EPS C$0.59 vs C$0.63 a year ago

* Analysts had on average forecast C$0.58 (Adds details on sales performance, earnings decline)

TORONTO, Feb 7 (Reuters) - Manulife Financial Corp on Wednesday reported a decline in fourth-quarter earnings, due to higher investment gains boosting earnings in the same period a year earlier.

Canada's biggest insurer said earnings per share, excluding one-off items, were 59 Canadian cents in the final quarter of 2017, compared with 63 Canadian cents in the same period the previous year.

Analysts on average expected earnings of 58 Canadian cents per share, according to Thomson Reuters I/B/E/S data.

Core earnings for the quarter were C$1.2 billion ($955 million), compared with C$1.3 billion the year before.

The insurer had investment gains of C$180 million in the fourth quarter of 2016 compared with C$100 million in the most recent quarter. The earnings decline also reflected the previous year benefiting form a release of funds that had been set aside to cover uncertain tax positions.

Canadian insurance companies are expanding rapidly in Asia, selling products to the growing middle class. The strategy is helping the firms drive growth and diversify from domestic markets where competition is intense.

Total insurance sales fell by 3 percent during the period to C$1 billion. Sales in Asia increased 7 percent, driven by strong growth in Singapore and Vietnam. Insurance sales in Canada fell by 31 percent.

The company generated net flows of C$3.7 billion in its wealth and asset management businesses, down from C$6.1 billion the year before, mainly due to lower net flows in institutional asset management which Manulife said the previous year benefited from three large mandates in Canada and Japan.

The company announced a quarterly dividend of 22 Canadian cents, up 7 percent on the previous quarter. ($1 = 1.2561 Canadian dollars) (Reporting by Matt Scuffham; Editing by Leslie Adler and Matthew Lewis)