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Is a Surprise in Store for Aflac (AFL) This Earnings Season?
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Supplemental health and life insurer Aflac Inc. (AFL - Free Report) is scheduled to release second-quarter 2016 financial results after the closing bell on Jul 28.
Why a Likely Positive Surprise?
Our proven model shows that Afllac is likely to beat on earnings as it has the right combination of two key components. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or at least #3 (Hold) to have a significantly higher chance of beating estimates.
Zacks ESP: The Earnings ESP for Aflac is +0.60%. This is because the Most Accurate estimate of $1.69 is above the Zacks Consensus Estimate of $1.68.
Zacks Rank: Alfac’s Zacks Rank #2 increases the predictive power of ESP.
Factors to Drive Q2 Results
We expect sales of third sector products to be down, given the production strength seen in 2015. Also sales of first sector products will be low since the Aflac is taking steps like production caps, commission restructuring, product re-pricing and in select cases, product discontinuance to control its sales.
Aflac is likely to have witnessed an increase in revenues and pretax income in the quarter. In addition, Aflac U.S. is likely to have experienced premium sales growth.
Also, underwriting margins may have improved on the strength of its franchise in Japan and U.S. supplemental health markets.
However, the persistently weakening yen/dollar exchange rate, a low interest rate environment, stiff competition, and a challenging economic and regulatory environment in Japan which might restricted growth, particularly, within premium income and bank channels’ sales can affect earnings.
Last quarter, Aflac delivered a 6.8% positive earnings surprise. It surpassed estimates in three out of the last four quarters. The average beat for the trailing four quarters is 4.1%.
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
Principal Financial Group Inc. (PFG - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #2. The company is scheduled to report second-quarter earnings results on Jul 28.
LPL Financial Holdings Inc. (LPLA - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank #3. The company is scheduled to report second-quarter earnings results on Jul 28.
Allstate Corp. (ALL - Free Report) has an earnings ESP of +3.7% and a Zacks Rank #3. The company is scheduled to report second-quarter earnings results on Aug 3.
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Is a Surprise in Store for Aflac (AFL) This Earnings Season?
Supplemental health and life insurer Aflac Inc. (AFL - Free Report) is scheduled to release second-quarter 2016 financial results after the closing bell on Jul 28.
Why a Likely Positive Surprise?
Our proven model shows that Afllac is likely to beat on earnings as it has the right combination of two key components. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or at least #3 (Hold) to have a significantly higher chance of beating estimates.
Zacks ESP: The Earnings ESP for Aflac is +0.60%. This is because the Most Accurate estimate of $1.69 is above the Zacks Consensus Estimate of $1.68.
Zacks Rank: Alfac’s Zacks Rank #2 increases the predictive power of ESP.
Factors to Drive Q2 Results
We expect sales of third sector products to be down, given the production strength seen in 2015. Also sales of first sector products will be low since the Aflac is taking steps like production caps, commission restructuring, product re-pricing and in select cases, product discontinuance to control its sales.
Aflac is likely to have witnessed an increase in revenues and pretax income in the quarter. In addition, Aflac U.S. is likely to have experienced premium sales growth.
Also, underwriting margins may have improved on the strength of its franchise in Japan and U.S. supplemental health markets.
However, the persistently weakening yen/dollar exchange rate, a low interest rate environment, stiff competition, and a challenging economic and regulatory environment in Japan which might restricted growth, particularly, within premium income and bank channels’ sales can affect earnings.
Last quarter, Aflac delivered a 6.8% positive earnings surprise. It surpassed estimates in three out of the last four quarters. The average beat for the trailing four quarters is 4.1%.
AFLAC INC Price and EPS Surprise
AFLAC INC Price and EPS Surprise | AFLAC INC Quote
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
Principal Financial Group Inc. (PFG - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #2. The company is scheduled to report second-quarter earnings results on Jul 28.
LPL Financial Holdings Inc. (LPLA - Free Report) has an Earnings ESP of +2.33% and a Zacks Rank #3. The company is scheduled to report second-quarter earnings results on Jul 28.
Allstate Corp. (ALL - Free Report) has an earnings ESP of +3.7% and a Zacks Rank #3. The company is scheduled to report second-quarter earnings results on Aug 3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>