It has been about a month since the last earnings report for Aflac (AFL Quick QuoteAFL - Free Report) . Shares have lost about 4.1% 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 its most recent earnings report in order to get a better handle on the important drivers.

Aflac Q4 Earnings Beat on Higher Variable Investment Income

Aflac reported fourth-quarter 2021 adjusted earnings per share of $1.28, which surpassed the Zacks Consensus Estimate by 2.4%. The bottom line improved 19.6% year over year.

AFL’s total revenues of $5.4 billion fell 8.1% year over year. The top line beat the consensus mark by 4.2%.

The better-than-expected fourth-quarter results were driven by improved variable investment income from alternative investments. The uptick in sales across both the Aflac Japan and Aflac U.S. segments coupled with reduced acquisition and operating expenses also contributed to the upside. However, year-over-year decline in revenues hampered AFL’s earnings.

Adjusted net investment income declined 5.1% year over year to $893 million in the fourth quarter.

Total acquisition and operating expenses of $1.6 billion slipped 6% year over year.

Aflac Japan

Total adjusted revenues of $3.6 billion decreased 8.5% year over year in the segment, mainly due to a 12.1% decline in net earned premiums, partly mitigated by 6.9% growth in adjusted net investment income. Pretax adjusted earnings of the segment improved 8% year over year to $887 million in the quarter under review. New annualized premium sales amounted to $128 million, which inched up 1.1% year over year.

Aflac U.S.

Total adjusted revenues inched up 0.1% year over year to $1.6 billion in the fourth quarter owing to 8.2% growth in adjusted net investment income, partly offset by a 1.3% decline in net earned premiums. Pretax adjusted earnings of the segment totaled $261 million, which climbed 39.6% year over year. Aflac U.S. sales of $464 million improved 19.6% year over year in the fourth quarter.

Solid Financial Position (as of Dec 31, 2021)

Total investments and cash of $143 billion fell 4.5% from the 2020-end level. Total assets declined 4.6% year over year to $157.5 billion.

Shareholders' equity (excluding AOCI) increased 5.3% year over year to $25.9 billion.

Share Repurchase Update

In the fourth quarter, Aflac bought back 11.1 million shares worth $625 million.

Full-Year Update

For 2021, Aflac’s revenues dipped 0.2% year over year to $22.1 billion. Full-year adjusted earnings per share of $5.94 improved 19.8% year over year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Aflac has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Aflac has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.