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Will New Business Growth in U.S. Unit Aid Aflac in Q3 Earnings?
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Key Takeaways
AFL's Q3 U.S. performance likely aided by new business gains and higher net earned premiums.
Japan segment may face pressure from lower investment income and rising technology expenses.
Consensus sees AFL revenues up 52.2% year over year, but EPS down 16.7% to $1.80.
Aflac Incorporated (AFL - Free Report) is scheduled to report third-quarter 2025 results on Nov. 4, after the closing bell. The Zacks Consensus Estimate for earnings per share is pegged at $1.80, which indicates a 16.7% decline from the prior-year quarter’s number.
The third-quarter earnings estimate has witnessed two upward revisions against one downward over the past 60 days. Meanwhile, the consensus estimate for revenues is pegged at $4.5 billion, suggesting a 52.2% surge from the year-ago quarter’s figure.
Image Source: Zacks Investment Research
Aflac’s Earnings Surprise History
Aflac’s bottom line beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 6.57%. 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 +0.84% because the Most Accurate Estimate of $1.81 per share is pegged higher than the Zacks Consensus Estimate of $1.80. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AFL currently carries a Zacks Rank of 3.
Factors to Note Ahead of AFL’s Results
Aflac’s revenue growth is likely to have been driven by strong contributions from its U.S. and Japan operations in the third quarter. The U.S. segment is expected to have been bolstered by an increase in net earned premiums, resulting from new business growth and strong persistency rates. However, the upside is likely to have been partly offset by a decline in net investment income and an elevated expense level. Net investment income is likely to have been hurt by reduced floating rate income.
The Zacks Consensus Estimate for net earned premiums for Aflac’s U.S. segment is pegged at $1.5 billion, indicating a 4.4% increase from the prior-year quarter’s figure. Additionally, the consensus mark for the unit’s pre-tax adiusted earnings stands at $344 million, which implies a 1.7% decline from the year-ago quarter’s number.
Meanwhile, Aflac’s Japan segment is expected to have benefited on the back of higher cancer insurance sales and strong persistency rates in the to-reported quarter. However, lower net investment income and higher technology expenses are likely to have dampened the segment’s quarterly performance.
The Zacks Consensus Estimate for net earned premiums of the unit is $1.7 billion, indicating a 1.3% increase from the prior-year quarter’s figure. The consensus mark for Aflac Japan’s pre-tax adjusted earnings stands at $814 million, suggesting a 24.1% decline from the prior-year quarter’s figure.
Furthermore, the expense ratio in the U.S. segment is expected to have improved due to prudent expense management efforts.
Other Stocks That Warrant a Look
Here are some other companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for HCI’s third-quarter earnings is pegged at $2.35 per share, indicating an increase to five-fold from the year-ago quarter’s figure.
HCI Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.70%.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank of 2 currently.
The Zacks Consensus Estimate for PRI’s third-quarter earnings is pegged at $5.51 per share, indicating 3% decline from the year-ago quarter’s number.
Primerica’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.21%.
Essent Group Ltd. (ESNT - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank of 3 currently. The Zacks Consensus Estimate for ESNT’s third-quarter earnings is pegged at $1.75 per share, indicating a 6.1% improvement from the year-ago quarter’s figure.
Essent Group’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 2.09%.
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Will New Business Growth in U.S. Unit Aid Aflac in Q3 Earnings?
Key Takeaways
Aflac Incorporated (AFL - Free Report) is scheduled to report third-quarter 2025 results on Nov. 4, after the closing bell. The Zacks Consensus Estimate for earnings per share is pegged at $1.80, which indicates a 16.7% decline from the prior-year quarter’s number.
The third-quarter earnings estimate has witnessed two upward revisions against one downward over the past 60 days. Meanwhile, the consensus estimate for revenues is pegged at $4.5 billion, suggesting a 52.2% surge from the year-ago quarter’s figure.
Image Source: Zacks Investment Research
Aflac’s Earnings Surprise History
Aflac’s bottom line beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 6.57%. 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 for AFL
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 +0.84% because the Most Accurate Estimate of $1.81 per share is pegged higher than the Zacks Consensus Estimate of $1.80. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: AFL currently carries a Zacks Rank of 3.
Factors to Note Ahead of AFL’s Results
Aflac’s revenue growth is likely to have been driven by strong contributions from its U.S. and Japan operations in the third quarter. The U.S. segment is expected to have been bolstered by an increase in net earned premiums, resulting from new business growth and strong persistency rates. However, the upside is likely to have been partly offset by a decline in net investment income and an elevated expense level. Net investment income is likely to have been hurt by reduced floating rate income.
The Zacks Consensus Estimate for net earned premiums for Aflac’s U.S. segment is pegged at $1.5 billion, indicating a 4.4% increase from the prior-year quarter’s figure. Additionally, the consensus mark for the unit’s pre-tax adiusted earnings stands at $344 million, which implies a 1.7% decline from the year-ago quarter’s number.
Meanwhile, Aflac’s Japan segment is expected to have benefited on the back of higher cancer insurance sales and strong persistency rates in the to-reported quarter. However, lower net investment income and higher technology expenses are likely to have dampened the segment’s quarterly performance.
The Zacks Consensus Estimate for net earned premiums of the unit is $1.7 billion, indicating a 1.3% increase from the prior-year quarter’s figure. The consensus mark for Aflac Japan’s pre-tax adjusted earnings stands at $814 million, suggesting a 24.1% decline from the prior-year quarter’s figure.
Furthermore, the expense ratio in the U.S. segment is expected to have improved due to prudent expense management efforts.
Other Stocks That Warrant a Look
Here are some other companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
HCI Group, Inc. (HCI - Free Report) has an Earnings ESP of +87.40% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HCI’s third-quarter earnings is pegged at $2.35 per share, indicating an increase to five-fold from the year-ago quarter’s figure.
HCI Group’s earnings beat estimates in each of the trailing four quarters, the average surprise being 41.70%.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +2.27% and a Zacks Rank of 2 currently.
The Zacks Consensus Estimate for PRI’s third-quarter earnings is pegged at $5.51 per share, indicating 3% decline from the year-ago quarter’s number.
Primerica’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.21%.
Essent Group Ltd. (ESNT - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank of 3 currently. The Zacks Consensus Estimate for ESNT’s third-quarter earnings is pegged at $1.75 per share, indicating a 6.1% improvement from the year-ago quarter’s figure.
Essent Group’s earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 2.09%.