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Can Aflac's (AFL) Q4 Earnings Beat on Strong US Business?
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Aflac Incorporated (AFL - Free Report) is slated to report fourth-quarter 2023 results on Jan 31, 2024, after the closing bell.
Q4 Estimates
The Zacks Consensus Estimate for Aflac’s fourth-quarter earnings per share is pegged at $1.47, which indicates an improvement of 14% from the prior-year quarter’s reported figure.
The consensus mark for revenues is $4.4 billion, suggesting 10.8% growth 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 14.50%. 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 +0.57% because the Most Accurate Estimate of $1.48 is pegged higher than the Zacks Consensus Estimate of $1.47. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AFL carries a Zacks Rank of 2.
Factors to Note
Results in the Japan segment are likely to have benefited on the back of higher sales fetched by its cancer insurance product. However, limited pay products attaining paid-up status are expected to have exerted strain on the unit’s net premiums earned in the fourth quarter.
The Zacks Consensus Estimate for net premiums earned in the Japan business is pegged at $1.9 billion, which indicates a decline of 12.3% from the prior-year quarter’s reported figure.
Net investment income in the Japan segment is expected to have gained from increased returns from Aflac’s alternative investment portfolio in the to-be-reported quarter. The consensus mark for net investment income is $636 million, suggesting 0.6% growth from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for the unit’s adjusted revenues is pegged at $2.5 billion, which implies an 8.4% fall from the year-ago quarter’s reported number. Expense ratio in the Japan business is likely to have witnessed an improvement in the fourth quarter, attributable to cost management efforts and expense allowance from reinsurance transactions. The consensus mark for adjusted expense ratio is 21.4%, which indicates an improvement of 150 basis points year over year.
AFL’s U.S. business is expected to have gained from higher sales and strong persistency rates in the quarter under review, which are likely to have contributed to improved net premiums earned. Consistent productivity improvements and the pursuit of growth initiatives across group life and disability, network dental and vision business lines are also likely to have contributed to the company’s overall net premiums earned.
The Zacks Consensus Estimate for net premiums earned in the U.S. segment is pegged at $1.4 billion, which indicates an improvement of 3.2% from the prior-year quarter’s reported figure.
The segment’s top line is also likely to have been aided by growth in adjusted net investment income in the fourth quarter, which in turn, is expected to have stemmed from improved yields from the fixed and floating rate portfolios of Aflac. The consensus mark for adjusted net investment income is $204 million, suggesting 6.3% growth from the year-ago quarter’s reported number.
The consensus mark for the unit’s adjusted revenues is pegged at $1.7 billion, which hints toward a 3.1% improvement from the year-ago quarter’s reported figure.
In the quarter under review, the margins of Aflac are likely to have received an impetus from lower benefits and claims, and a decline in acquisition and operating expenses.
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 CNO’s fourth-quarter 2023 earnings is pegged at 85 cents per share, suggesting a 51.8% surge from the year-ago quarter’s reported number. The consensus mark for revenues is $934.1 million, suggesting a 4.1% fall from the prior-year quarter’s figure.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for PRI’s fourth-quarter 2023 earnings is $4.26 per share, indicating a 22.1% improvement from the prior-year quarter’s reported figure.
Primerica’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.84%.
Everest Group, Ltd. (EG - Free Report) currently has an Earnings ESP of +1.18% and a Zacks Rank of 3. The Zacks Consensus Estimate for EG’s fourth-quarter 2023 earnings is pegged at $14.63 per share, which implies a 19.8% rise from the prior-year quarter’s reported figure.
Everest Group’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 24.50%.
Image: Bigstock
Can Aflac's (AFL) Q4 Earnings Beat on Strong US Business?
Aflac Incorporated (AFL - Free Report) is slated to report fourth-quarter 2023 results on Jan 31, 2024, after the closing bell.
Q4 Estimates
The Zacks Consensus Estimate for Aflac’s fourth-quarter earnings per share is pegged at $1.47, which indicates an improvement of 14% from the prior-year quarter’s reported figure.
The consensus mark for revenues is $4.4 billion, suggesting 10.8% growth 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 14.50%. 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 +0.57% because the Most Accurate Estimate of $1.48 is pegged higher than the Zacks Consensus Estimate of $1.47. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AFL carries a Zacks Rank of 2.
Factors to Note
Results in the Japan segment are likely to have benefited on the back of higher sales fetched by its cancer insurance product. However, limited pay products attaining paid-up status are expected to have exerted strain on the unit’s net premiums earned in the fourth quarter.
The Zacks Consensus Estimate for net premiums earned in the Japan business is pegged at $1.9 billion, which indicates a decline of 12.3% from the prior-year quarter’s reported figure.
Net investment income in the Japan segment is expected to have gained from increased returns from Aflac’s alternative investment portfolio in the to-be-reported quarter. The consensus mark for net investment income is $636 million, suggesting 0.6% growth from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for the unit’s adjusted revenues is pegged at $2.5 billion, which implies an 8.4% fall from the year-ago quarter’s reported number. Expense ratio in the Japan business is likely to have witnessed an improvement in the fourth quarter, attributable to cost management efforts and expense allowance from reinsurance transactions. The consensus mark for adjusted expense ratio is 21.4%, which indicates an improvement of 150 basis points year over year.
AFL’s U.S. business is expected to have gained from higher sales and strong persistency rates in the quarter under review, which are likely to have contributed to improved net premiums earned. Consistent productivity improvements and the pursuit of growth initiatives across group life and disability, network dental and vision business lines are also likely to have contributed to the company’s overall net premiums earned.
The Zacks Consensus Estimate for net premiums earned in the U.S. segment is pegged at $1.4 billion, which indicates an improvement of 3.2% from the prior-year quarter’s reported figure.
The segment’s top line is also likely to have been aided by growth in adjusted net investment income in the fourth quarter, which in turn, is expected to have stemmed from improved yields from the fixed and floating rate portfolios of Aflac. The consensus mark for adjusted net investment income is $204 million, suggesting 6.3% growth from the year-ago quarter’s reported number.
The consensus mark for the unit’s adjusted revenues is pegged at $1.7 billion, which hints toward a 3.1% improvement from the year-ago quarter’s reported figure.
In the quarter under review, the margins of Aflac are likely to have received an impetus from lower benefits and claims, and a decline in acquisition and operating expenses.
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:
CNO Financial Group, Inc. (CNO - Free Report) currently has an Earnings ESP of +8.24% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CNO’s fourth-quarter 2023 earnings is pegged at 85 cents per share, suggesting a 51.8% surge from the year-ago quarter’s reported number. The consensus mark for revenues is $934.1 million, suggesting a 4.1% fall from the prior-year quarter’s figure.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for PRI’s fourth-quarter 2023 earnings is $4.26 per share, indicating a 22.1% improvement from the prior-year quarter’s reported figure.
Primerica’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.84%.
Everest Group, Ltd. (EG - Free Report) currently has an Earnings ESP of +1.18% and a Zacks Rank of 3. The Zacks Consensus Estimate for EG’s fourth-quarter 2023 earnings is pegged at $14.63 per share, which implies a 19.8% rise from the prior-year quarter’s reported figure.
Everest Group’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 24.50%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.