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The supplemental health and life insurer – Aflac Inc. (AFL - Analyst Report) is scheduled to release its first-quarter 2014 financial results after the closing bell on Apr 29.

In the last reported fourth-quarter 2013, the company had delivered a 0.7% positive earnings surprise, while the four-quarter trailing average beat is pegged at 3.9%. Let’s see how things are shaping up for this announcement.

Earnings Whispers?

Our proven model shows that Aflac is unlikely to beat earnings as it lacks the required combination of two key ingredients.

Zacks ESP: The Most Accurate estimate of $1.59 per share is at par with the Zacks Consensus Estimate of Alfac. Hence, the Expected Surprise Prediction or Earnings ESP, which is the difference between the aforementioned estimates, is 0.00%.

Zacks Rank: Aflac has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1, 2 and 3 have significantly higher chances of beating earnings. Conversely, Sell-rated stocks (#4 and 5) are kept under the radar and are never considered going into the earnings announcement. 

The combination of Aflac’s Zacks Rank #3 and 0.00% ESP makes surprise prediction difficult.

Factors that Seek Attention

Aflac’s top line remains sufficiently exposed to a challenging operating environment due to fluctuation in the yen/dollar exchange rate and interest rate risk, primarily in Japan that accounted for about 74% of revenues in 2013.Despite the re-pricing initiatives taken in Apr 2013, the company continues to project declining trends in the WAYS sales in 2014 as well.

Moreover, total portfolio yield in Japan slipped to 2.80% in 2013 from 3.56% in 2010. Meanwhile, loss of a large payroll account, persistent weakness in confidence from small businesses and a few sales associates cast a cautious outlook on the sales opportunities in the U.S. in 2014. Overall, these factors have impelled management to peg its earnings growth guidance at low-single digit growth in 2014.

Hence, we remain cautious of the tepid growth guidance, repatriation of funds and investment losses, given the sluggish economy faced by Japan and the negative impact of difficult comps.

Yet, Aflac benefits from healthy capital ratios, product expertise, stable ratings and accelerated capital deployment. In the long run, a stable economy, investment restructuring and the Japan Post agreement should help the company gather momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this coming quarter: 

Everest Re Group Ltd. (RE - Analyst Report),earnings ESP of +7.85% and a Zacks Rank #1 (Strong Buy).

Endurance Specialty Holdings Ltd. (ENH - Snapshot Report), earnings ESP of +2.63% and a Zacks Rank #2 (Buy).

ACE Ltd. (ACE - Analyst Report), earnings ESP of +1.41% and a Zacks Rank #2.

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