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Aflac (AFL) Q3 Earnings & Revenues Surpass Estimates

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Aflac Inc.’s (AFL - Free Report) third-quarter 2018 earnings of $1.03 per share surpassed the Zacks Consensus Estimate by 4.04% and increased 21.2% year over year.

Results buoyed up on overall favorable pretax margins and a lower effective tax rate as a result of tax reform.

Total revenues for the third quarter increased 1.3% year over year to $5.58 billion and beat the Zacks Consensus Estimate by 0.2%.

Aflac Incorporated Price, Consensus and EPS Surprise

Strong Quarterly Segment Results

Aflac Japan

Total revenues inched up 0.1% year over year to $3.8 billion, led by an 8% rise in net investment income and offset by 1.3% decline in premium income. Pretax operating earnings increased 1.1% to $756 million.

Aflac U.S.

Total revenues increased 2.6% year over year to $1.6 billion, led by a 3.3% increase in premium income to $359 million and 3.3% higher annualized premium sales. Net investment income increased 1.1% to $187 million driven by higher income from floating rate assets, partially offset by the drawdown of excess capital in the U.S. segment.  

Pretax operating earnings for the U.S. segment were $334 million, up 5.7% higher year over year.

Share Repurchase Update

During the third quarter, the company purchased 7 million shares worth $322 million.

The board of directors declared fourth-quarter dividend of 26 cents per share, payable on Dec 3, 2018 to shareholders of record at the close of business on Nov 21, 2018.

Solid Financial Position

Total investments and cash as of Sep 30, 2018 were $124.2 billion, up 1.4% year over year.

At the end of the third quarter of 2018, total assets were $137.9 billion, up 1.4% year over year.

Shareholders' equity was $23.2 billion, as of Sep 30, 2018, up 5.7% year over year.

2018 Guidance

Driven by strong results for the first nine months of 2018, the company expects to achieve the high end of its previously issued guidance of $3.90-$4.06.

For 2018, the company anticipates that in its Japan business, third-sector earned premium will continue its steady growth in the 2% to 3% range, reflecting Aflac's stable sales and high persistency.

Coming to its U.S. segment, for the full year, Aflac anticipates growth in earned premium within 2% to 3% and new annualized premium sales growth within 3% to 5%.

The company anticipates $1.1 to $1.4 billion of share buyback in 2018.

Zacks Rank & Stocks to Consider

Aflac has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among the other players from the insurance industry that have reported third-quarter earnings so far, the bottom line of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and Unum Group (UNM - Free Report) beat the respective Zacks Consensus Estimate by 37.7%, 33.3% and 7.03%, respectively.

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