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Aflac (AFL) to Announce Q2 Earnings: Here's What to Expect
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Aflac Incorporated (AFL - Free Report) is set to report second-quarter 2022 results on Aug 1, after the closing bell.
In the last reported quarter, this leading insurance provider reported adjusted earnings per share of $1.42, beating the Zacks Consensus Estimate of $1.38, due to improved returns from alternative investments. The uptick in sales across the Aflac U.S. segment and reduced benefits and expenses contributed to the upside. Yet, a year-over-year decline in net earned premiums from Japan operations partially offset the positives.
The Zacks Consensus Estimate for second-quarter earnings per share of $1.29 has witnessed no movement in the past week. The estimated figure suggests a decrease of 18.9% from the prior-year reported number. The consensus estimate for second-quarter revenues of $4.8 billion indicates a 13.6% decrease from the year-ago reported figure.
Aflac beat the consensus estimate in each of the prior four quarters, with the average being 12.1%. This is depicted in the graph below:
While U.S. operations in the second quarter are likely to have benefited from interest rate hikes by the Fed, Japan’s operations are likely to have been affected by a lower interest rate environment. As such, the Zacks Consensus Estimate for net investment income indicates an 11.4% year-over-year decrease. This might have been partially offset by improved returns from alternative investments.
Further, the Zacks Consensus Estimate for total net earned premiums is pegged at $3,922 million, signaling a decline from $4,441 million a year ago. Our estimate suggests total net earned premiums of $3,981.4 million in the second quarter. The metric is expected to decline 4.9% and 12.9% year over year in Aflac U.S. and Aflac Japan, respectively. This might have resulted in a year-over-year decrease in the bottom line for AFL.
The Zacks Consensus Estimate for pre-tax income in Aflac U.S. is pegged at $306 million, indicating a decline from $413 million a year ago. Similarly, the consensus mark for the metric in Aflac Japan is pegged at $771 million, signaling a decrease from $1,004 million in the year-ago period. Our estimate suggests consolidated adjusted pre-tax income of $1,041.5 million.
Though Aflac has undertaken several cost-curbing efforts, its expenses are likely to have remained high in the second quarter due to substantial investments in core technology platforms or digital capabilities. Among these platforms, AFL remains steadfast in upgrading its dental and vision platforms 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, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict 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 chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -1.00%. The Most Accurate Estimate is currently pegged at $1.28 per share, lower than the Zacks Consensus Estimate of $1.29.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Aflac currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Aflac, here are some companies in the Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Assurant’s bottom line for the to-be-reported quarter is pegged at $3.21 per share, indicating a 7.4% year-over-year increase. AIZ beat earnings estimates in each of the trailing four quarters, delivering an average of 18.3%.
LPL Financial Holdings Inc. (LPLA - Free Report) has an Earnings ESP of +0.13% and is a Zacks #1 Ranked player.
The Zacks Consensus Estimate for LPL Financial’s bottom line for the to-be-reported quarter is pegged at $2.01 per share, implying an 8.7% improvement from the year-ago figure. LPLA beat earnings estimates in each of the trailing four quarters, delivering an average of 7.7%.
Armada Hoffler Properties, Inc. (AHH - Free Report) has an Earnings ESP of +4.17% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Armada Hoffler’s bottom line for the to-be-reported quarter is pegged at 29 cents per share. AHH beat earnings estimates thrice in the trailing four quarters and met once, delivering an average surprise of 6%.
Image: Bigstock
Aflac (AFL) to Announce Q2 Earnings: Here's What to Expect
Aflac Incorporated (AFL - Free Report) is set to report second-quarter 2022 results on Aug 1, after the closing bell.
In the last reported quarter, this leading insurance provider reported adjusted earnings per share of $1.42, beating the Zacks Consensus Estimate of $1.38, due to improved returns from alternative investments. The uptick in sales across the Aflac U.S. segment and reduced benefits and expenses contributed to the upside. Yet, a year-over-year decline in net earned premiums from Japan operations partially offset the positives.
Let’s see how things have shaped up prior to the second-quarter earnings announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share of $1.29 has witnessed no movement in the past week. The estimated figure suggests a decrease of 18.9% from the prior-year reported number. The consensus estimate for second-quarter revenues of $4.8 billion indicates a 13.6% decrease from the year-ago reported figure.
Aflac beat the consensus estimate in each of the prior four quarters, with the average being 12.1%. This is depicted in the graph below:
Aflac Incorporated Price and EPS Surprise
Aflac Incorporated price-eps-surprise | Aflac Incorporated Quote
Factors to Note
While U.S. operations in the second quarter are likely to have benefited from interest rate hikes by the Fed, Japan’s operations are likely to have been affected by a lower interest rate environment. As such, the Zacks Consensus Estimate for net investment income indicates an 11.4% year-over-year decrease. This might have been partially offset by improved returns from alternative investments.
Further, the Zacks Consensus Estimate for total net earned premiums is pegged at $3,922 million, signaling a decline from $4,441 million a year ago. Our estimate suggests total net earned premiums of $3,981.4 million in the second quarter. The metric is expected to decline 4.9% and 12.9% year over year in Aflac U.S. and Aflac Japan, respectively. This might have resulted in a year-over-year decrease in the bottom line for AFL.
The Zacks Consensus Estimate for pre-tax income in Aflac U.S. is pegged at $306 million, indicating a decline from $413 million a year ago. Similarly, the consensus mark for the metric in Aflac Japan is pegged at $771 million, signaling a decrease from $1,004 million in the year-ago period. Our estimate suggests consolidated adjusted pre-tax income of $1,041.5 million.
Though Aflac has undertaken several cost-curbing efforts, its expenses are likely to have remained high in the second quarter due to substantial investments in core technology platforms or digital capabilities. Among these platforms, AFL remains steadfast in upgrading its dental and vision platforms 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, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict 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 chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -1.00%. The Most Accurate Estimate is currently pegged at $1.28 per share, lower than the Zacks Consensus Estimate of $1.29.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Aflac currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Aflac, here are some companies in the Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +2.34% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Assurant’s bottom line for the to-be-reported quarter is pegged at $3.21 per share, indicating a 7.4% year-over-year increase. AIZ beat earnings estimates in each of the trailing four quarters, delivering an average of 18.3%.
LPL Financial Holdings Inc. (LPLA - Free Report) has an Earnings ESP of +0.13% and is a Zacks #1 Ranked player.
The Zacks Consensus Estimate for LPL Financial’s bottom line for the to-be-reported quarter is pegged at $2.01 per share, implying an 8.7% improvement from the year-ago figure. LPLA beat earnings estimates in each of the trailing four quarters, delivering an average of 7.7%.
Armada Hoffler Properties, Inc. (AHH - Free Report) has an Earnings ESP of +4.17% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Armada Hoffler’s bottom line for the to-be-reported quarter is pegged at 29 cents per share. AHH beat earnings estimates thrice in the trailing four quarters and met once, delivering an average surprise of 6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.