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Is a Beat in Store for Aflac (AFL) This Earnings Season?
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Aflac Incorporated (AFL - Free Report) is scheduled to release second-quarter 2023 results on Aug 1, after market close.
Q2 Estimates
The Zacks Consensus Estimate for Aflac’s second-quarter earnings per share is pegged at $1.42, which implies a decline of 2.7% from the prior-year quarter’s reported figure.
The consensus mark for revenues is pinned at $4,518 million, suggesting a 16.3% fall from the year-ago quarter’s reported number.
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 8.23%. This is depicted in the chart below:
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, which is the case here.
Earnings ESP: Aflac has an Earnings ESP of +1.41% because the Most Accurate Estimate of $1.44 is pegged higher than the Zacks Consensus Estimate of $1.42. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AFL carries a Zacks Rank of 3.
Factors to Note
In the second quarter, the results of Aflac Japan are likely to have received an impetus from the launch of an enhanced cancer insurance product, thereby leading to increased persistency rates and higher sales. An improved expense ratio is expected to have contributed to the segment’s results. However, limited pay products attaining paid-up status and the execution of a global reinsurance strategy are likely to have been roadblocks for AFL’s Japan unit in the to-be-reported quarter.
We expect adjusted revenues of Aflac Japan to be $2,614.8 million in the second quarter, which hints toward a year-over-year decline of 17%.
The prospects of Aflac U.S. are expected to have gained from improved adjusted net investment income, which in turn, is likely to have stemmed from expanding floating rate income. Additionally, strong dental and vision sales, new product launches and tie-ups are expected to have driven the unit’s quarterly results. However, an elevated expense level in relation to pursued investments across emerging growth businesses is likely to have dampened the performance of the unit in the second quarter.
Our estimate for adjusted net investment income in the segment stands at $195.7 million in the to-be-reported quarter, suggesting 1.4% growth year over year. We anticipate adjusted revenues of $1,616.8 million in Aflac U.S., which indicates a 0.7% dip year over year.
Multiple cost-curbing initiatives are likely to have provided some respite to Aflac’s margins in the second quarter. The company continues to undertake investments to upgrade core technology platforms or digital capabilities in order to save costs, bring about automation in processes and boost operational efficiencies. Our estimate for total acquisition and other operating expenses stands at $1,262.3 million, which implies a decline of 5.4% year over year.
Other Stocks to Consider
Here are some other companies from the insurance space, which according to our model, also have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for AEL’s second-quarter 2023 earnings is pegged at $1.65 per share, suggesting a 68.4% surge from the prior-year quarter’s reported number.
American Equity's earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.01%.
Lincoln National Corporation (LNC - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for LNC’s second-quarter 2023 earnings is pegged at $1.92 per share, which implies a 13.9% fall from the prior-year quarter’s reported figure.
The consensus mark for Lincoln National’s second-quarter earnings has moved 4.3% north over the past 30 days.
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for AIZ’s second-quarter 2023 earnings stands at $2.60 per share, indicating an 11.9% decline from the prior-year quarter’s reported figure.
Assurant’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.96%.
Image: Bigstock
Is a Beat in Store for Aflac (AFL) This Earnings Season?
Aflac Incorporated (AFL - Free Report) is scheduled to release second-quarter 2023 results on Aug 1, after market close.
Q2 Estimates
The Zacks Consensus Estimate for Aflac’s second-quarter earnings per share is pegged at $1.42, which implies a decline of 2.7% from the prior-year quarter’s reported figure.
The consensus mark for revenues is pinned at $4,518 million, suggesting a 16.3% fall from the year-ago quarter’s reported number.
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 8.23%. This is depicted in the chart below:
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, which is the case here.
Earnings ESP: Aflac has an Earnings ESP of +1.41% because the Most Accurate Estimate of $1.44 is pegged higher than the Zacks Consensus Estimate of $1.42. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AFL carries a Zacks Rank of 3.
Factors to Note
In the second quarter, the results of Aflac Japan are likely to have received an impetus from the launch of an enhanced cancer insurance product, thereby leading to increased persistency rates and higher sales. An improved expense ratio is expected to have contributed to the segment’s results. However, limited pay products attaining paid-up status and the execution of a global reinsurance strategy are likely to have been roadblocks for AFL’s Japan unit in the to-be-reported quarter.
We expect adjusted revenues of Aflac Japan to be $2,614.8 million in the second quarter, which hints toward a year-over-year decline of 17%.
The prospects of Aflac U.S. are expected to have gained from improved adjusted net investment income, which in turn, is likely to have stemmed from expanding floating rate income. Additionally, strong dental and vision sales, new product launches and tie-ups are expected to have driven the unit’s quarterly results. However, an elevated expense level in relation to pursued investments across emerging growth businesses is likely to have dampened the performance of the unit in the second quarter.
Our estimate for adjusted net investment income in the segment stands at $195.7 million in the to-be-reported quarter, suggesting 1.4% growth year over year. We anticipate adjusted revenues of $1,616.8 million in Aflac U.S., which indicates a 0.7% dip year over year.
Multiple cost-curbing initiatives are likely to have provided some respite to Aflac’s margins in the second quarter. The company continues to undertake investments to upgrade core technology platforms or digital capabilities in order to save costs, bring about automation in processes and boost operational efficiencies. Our estimate for total acquisition and other operating expenses stands at $1,262.3 million, which implies a decline of 5.4% year over year.
Other Stocks to Consider
Here are some other companies from the insurance space, which according to our model, also have the right combination of elements to beat on earnings this time around:
American Equity Investment Life Holding Company (AEL - Free Report) has an Earnings ESP of +1.12% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AEL’s second-quarter 2023 earnings is pegged at $1.65 per share, suggesting a 68.4% surge from the prior-year quarter’s reported number.
American Equity's earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.01%.
Lincoln National Corporation (LNC - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for LNC’s second-quarter 2023 earnings is pegged at $1.92 per share, which implies a 13.9% fall from the prior-year quarter’s reported figure.
The consensus mark for Lincoln National’s second-quarter earnings has moved 4.3% north over the past 30 days.
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for AIZ’s second-quarter 2023 earnings stands at $2.60 per share, indicating an 11.9% decline from the prior-year quarter’s reported figure.
Assurant’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.96%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.