Back to top

Image: Bigstock

Why Is Aflac (AFL) Down 16.4% Since Last Earnings Report?

Read MoreHide Full Article

A month has gone by since the last earnings report for Aflac (AFL - Free Report) . Shares have lost about 16.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Aflac due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Aflac’s Q4 Earnings and Revenues Surpass Estimates

Aflac Inc.’s earnings per share of $1.03 beat the Zacks Consensus Estimate by 1.98% and increased 1% year over year.

Total revenues in the quarter increased 9.3% year over year to $5.6 billion and surpassed the Zacks Consensus Estimate by 0.85%.

Further, total acquisition and operating expenses inched up 5.5% year over year to $1.56 billion.

Strong Segmental Results

Aflac Japan
 
Total revenues increased 2.2% year over year to $3.8 billion, led by a 2.1% increase in premium income to $3.2 billion, and 2.1% rise in net investment income to $684 million. Pre-tax operating earnings decreased 5.1% from the prior-year quarter to $757 million.

Aflac United States

Total revenues increased 1.6% year over year to $1.64 billion, led by a 1.1% increase in premium income to $1.4 billion, partly offset by 1.6% decline in net investment income to $180 million. Pre-tax operating earnings from the U.S. segment were $275 million, up 0.4% year over year.

Dividend Update

The board of directors declared the first quarter dividend of 28 cents per share, payable on Mar 2, 2020 to shareholders of record at the close of business on Feb 19, 2020.

Share Repurchase Update

The company purchased 8.9 million shares worth $470 million during the fourth quarter.

Solid Financial Position (as of Dec 31, 2019)

Total investments and cash were $138.1 billion, up 9.4% year over year.
Total assets were $152.8 billion, up 8.8% year over year.
Shareholders' equity (excluding AOCI) was $28.9 billion, up 23.4% year over year.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, Aflac has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Aflac has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Aflac Incorporated (AFL) - free report >>

Published in