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Aflac (AFL) to Report Q1 Earnings: What's in the Cards?

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Aflac Incorporated (AFL - Free Report) is scheduled to release first-quarter 2022 earnings on Apr 27, after the market closes.

Q1 Estimates

The Zacks Consensus Estimate for AFL's first-quarter earnings per share is pegged at $1.38, which indicates a decline of 9.8% from the prior-year quarter.

The consensus mark for revenues stands at $5.2 billion, suggesting a decline of 12.1% from the year-ago quarter.

Earnings Surprise History

Aflac boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 18.20%. This is depicted in the chart below:

Aflac Incorporated Price and EPS Surprise

Aflac Incorporated Price and EPS Surprise

Aflac Incorporated price-eps-surprise | Aflac Incorporated Quote

What Our Quantitative Model Unveils

Our proven model predicts an earnings beat for Aflac this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Aflac has an Earnings ESP of 1.76% because the Most Accurate Estimate of $1.40 is pegged higher than the Zacks Consensus Estimate of $1.38. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: AFL currently carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.

Factors to Note

New product launches, strong premium persistency rates and growth in adjusted net investment income stemming from a sound private equity portfolio are likely to have favored the Aflac Japan segment in the first quarter.

However, reduced new sales and a modest rise in lapse rates are likely to have weighed on net earned premiums of Aflac Japan in the to-be-reported quarter. With COVID conditions continuously impacting its Japan business, AFL has been actively resorting to utilizing virtual sales technology for mitigating headwinds encountered in face-to-face sales.

Meanwhile, Aflac U.S. segment is likely to have benefited from new business formation, lower incurred benefits, a strong dental and vision network, solid premium persistency rates and growing sales in the first quarter. Increased variable investment income may have boosted the segment's adjusted net investment income. However, elevated adjusted expenses incurred within the segment might have dampened the segment's performance in the to-be-reported quarter.

Though Aflac undertakes several cost-curbing efforts, its expenses are likely to have remained high in the first quarter due to substantial investments in core technology platforms or digital capabilities. Among these platforms, AFL remains steadfast in upgrading its dental and vision platform so that it can manage higher volumes. The investments are aimed at bringing about growth in earned premiums and operational efficiencies. However, high expenses might have hurt AFL's bottom line in the to-be-reported quarter.

Other Stocks to Consider

Here are some other companies from the insurance space that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time around:

ProAssurance Corporation (PRA - Free Report) has an Earnings ESP of +27.54% and a Zacks Rank #2, currently. The Zacks Consensus Estimate for ProAssurance's first-quarter 2022 earnings is pegged at 17 cents, which indicates an increase of more than four-fold from the prior-year quarter.

PRA beat earnings estimates in each of the trailing four quarters in 2021.

The Hanover Insurance Group, Inc. (THG - Free Report) has an Earnings ESP of +0.06% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for Hanover Insurance Group's first-quarter 2022 earnings stands at $2.85, suggesting growth of 71.7% from the prior-year quarter's reported figure.

THG beat earnings estimates in each of the four reported quarters in 2021.

Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +3.68% and a Zacks Rank of 3. The Zacks Consensus Estimate for Primerica's first-quarter 2022 earnings is pegged at $2.79, which indicates an improvement of 14.3% from the prior-year reported number.

PRI beat earnings estimates in two of the four reported quarters in 2021 and missed twice.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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