AFLAC Earns $1.59 per Share Crossing Wall Street

AFLAC Earns $1.59 per Share

After the closing bell, AFLAC (AFL) reported Q2 operating earnings of $1.59 per share. That’s an increase of 24.2% and it beat the Street’s consensus of $1.27 per share. The weaker yen/dollar exchange rate impacted earnings by one penny per share. Total revenues for the quarter increased from $5.4 billion to $5.6 billion. For the first six months of this year, AFLAC has made $3.10 per share.

Here are some highlights:

Shareholders’ equity was $33.7 billion, or $50.20 per share, at June 30, 2021, compared with $29.4 billion, or $41.21 per share, at June 30, 2020.

Adjusted earnings in the second quarter were $1.1 billion, compared with $921 million in the second quarter of 2020, reflecting an increase of 17.3% driven by lower-than-expected benefit ratios and higher net investment income, primarily in Japan, and a favorable effective tax rate.

Shareholders’ equity excluding AOCI (or adjusted book value*) was $25.7 billion, or $38.27 per share at June 30, 2021, compared with $22.7 billion, or $31.75 per share, at June 30, 2020. The annualized adjusted return on equity excluding foreign currency impact in the second quarter was 17.0%.

Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: “The company generated strong earnings for the first six months, largely supported by low benefit ratios associated with pandemic conditions and better-than-expected returns from alternative investments. With respect to second quarter sales results in the United States and Japan, we continued to see improvement and expect a stronger second half of the year in both countries. We remain cautiously optimistic and vigilant as vaccination efforts continue in the face of uncertainty associated with emerging variants.

“Looking at our operations in Japan, second quarter sales improved year over year, continuing to reflect a boost from the first quarter launch of our new medical product. We continue to navigate evolving pandemic conditions in Japan, including the continued state of emergency in Tokyo and select prefectures. We are pleased with the continued strengthening of our strategic alliance with Japan Post Holdings, which includes initiatives to foster digital transformation and innovation. In addition, Japan Post Group’s resumption of proactive sales paves the way for gradual improvement in Aflac cancer insurance sales in the second half of the year.

“In the U.S., small businesses are still in recovery mode, which we expect to continue through 2021. At the same time, larger businesses remain focused on returning employees to the worksite, rather than modifying the benefits for their employees. We continue to work toward reinforcing our position and generating stronger sales in the second half of 2021.

“As always, we remain committed to prudent liquidity and capital management. We continue to maintain strong capital ratios on behalf of our policyholders in both the U.S. and Japan. We treasure our 38-year track record of dividend growth and remain committed to extending it, supported by the strength of our capital and cash flows. At the same time, we will continue to tactically repurchase shares, focused on integrating the growth investments we have made in our platform. By doing so, we look to emerge from this period in a continued position of strength and leadership.”

Posted by Eddy Elfenbein on July 28th, 2021 at 4:16 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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