UPDATE 2-Sun Life reports rare earnings miss as US business shows weakness

(Adds details throughout, analyst comments)

May 9 (Reuters) - Canada's No. 2 life insurer Sun Life Financial on Thursday missed core profit estimates for the first time in 12 quarters, hurt by weakness in the U.S., a region where it has been expanding.

The quarterly results were also affected by the sale of Sun Life UK and the end of the public health emergency in the United States, CEO Kevin Strain said in a statement.

Sun Life has established more partnerships in Asia and other key regions as a part of its expansion efforts and acquired firms such as telemedicine company Dialogue Health and U.S. dental benefits company DentaQuest.

However, earnings in the U.S. were hurt by lower dental results driven by the impact of Medicaid redeterminations and market-related impacts largely from real estate investments, the company said.

"The US business was a bit disappointing... it is mostly related to unfavorable underwriting," Morningstar analyst Suryansh Sharma noting he would watch the segment more closely.

The overall results were in contrast with

bigger peer Manulife

which reported bigger-than-expected profit powered by strength in its Asia unit that pushed its stock to over a 15-year high.

For Sun Life, underlying net income in Asia rose 26% while that of U.S. fell 20%. The wealth and asset management unit reported a 1% decrease.

That led to overall underlying net income fall of 2.2% to C$875 million. On a per share basis, the company earned C$1.50. Analysts were expecting C$1.65 per share, according to LSEG data.

Earnings from Sun Life's group health and protection businesses fell 8% to C$280 million ($204.7 million

It posted a 4% drop in underlying net income from its individual protection business to C$278 million, due to the sale of Sun Life UK.

"While Sun Life's balance sheet remains strong, meriting a lift in the dividend, we do not expect it to be enough to mask the market's disappointment in the results," Jefferies analyst John Aiken wrote in a note.

($1 = 1.3679 Canadian dollars) (Reporting by Arasu Kannagi Basil in Bengaluru and Nivedita Balu in Toronto; Editing by Shailesh Kuber and David Gregorio)