Aflac Inc (AFL) Q3 2024 Earnings Call Highlights: Strong Adjusted EPS Growth Amid Foreign ...

GuruFocus News
4 min read

In This Article:

  • GAAP Earnings Per Share: Loss of $0.17 per diluted share due to foreign exchange-related losses.

  • Adjusted Earnings Per Share: Increased 17.4% to $2.16 per diluted share.

  • Year-to-Date Earnings Per Share: $6.23, with adjusted earnings per share rising 13.5% to $5.64.

  • Japan Sales Growth: 12.3% year-over-year increase in sales for the third quarter.

  • US Sales Growth: 5.5% sales growth for the quarter.

  • Japan Pretax Profit Margin: 44.7%, up 11.9 percentage points year-over-year.

  • US Pretax Profit Margin: 20.8% for the quarter.

  • Japan Benefit Ratio: 49.2% for the quarter, down 15.9 percentage points year-over-year.

  • US Benefit Ratio: 47.6%, 11.7 percentage points higher than Q3 2023.

  • Japan Expense Ratio: 20%, up 100 basis points year-over-year.

  • US Expense Ratio: 38%, down 260 basis points year-over-year.

  • Adjusted Book Value Per Share: Increased 7.3% including foreign currency translation gains and losses.

  • Adjusted Return on Equity (ROE): 16.7% for the quarter.

  • Share Repurchase: $500 million in shares repurchased during the quarter.

  • Dividend: Fourth quarter dividend of $0.50 declared.

  • Unencumbered Holding Company Liquidity: $3.9 billion, $2.1 billion above minimum balance.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Adjusted earnings per diluted share increased by 17.4% to $2.16, indicating strong financial performance.

  • Aflac Inc (NYSE:AFL) achieved a 12.3% year-over-year increase in sales in Japan, driven by the successful launch of a new product.

  • The U.S. segment saw a 5.5% sales growth, with strong performance in group life, absence management, and disability.

  • The company maintained a strong capital position with an SMR of about 1,100% and a combined RBC estimated to be greater than 650%.

  • Aflac Inc (NYSE:AFL) repurchased $500 million in shares during the quarter, demonstrating a commitment to returning value to shareholders.

Negative Points

  • Aflac Inc (NYSE:AFL) reported a loss of $0.17 per diluted share on a US GAAP basis due to increased foreign exchange-related losses.

  • Net premiums in Japan declined by 10.5%, impacted by internal reinsurance transactions and paid-up policies.

  • The U.S. benefit ratio increased by 11.7 percentage points year-over-year, driven by lower remeasurement gains.

  • The expense ratio in Japan increased by 100 basis points year-over-year, primarily due to a decline in revenues.

  • Variable investment income ran $27 million below long-term return expectations, affecting overall financial performance.

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