Summary
Aflac Incorporated reported a decline in net earnings and diluted earnings per share for both the three- and nine-month periods ended September 30, 2015, compared to the prior year. This decrease was primarily attributed to a weaker Japanese yen against the U.S. dollar, which negatively impacted revenue and earnings when translated. Additionally, the company recognized significant other-than-temporary impairment losses on certain securities during the period, particularly impacting the bank/financial institution bond category. Despite the earnings decline, Aflac Japan demonstrated strong sales growth in its third sector products (cancer and medical), benefiting from product enhancements and expanded distribution channels like Japan Post. The U.S. segment showed modest growth in net premium income and new annualized premium sales, with a focus on optimizing its sales force and introducing new group products. The company also actively managed its capital by redeeming senior notes and repurchasing its own stock.
Financial Highlights
32 data points| Revenue | $5.04B |
| SG&A Expenses | $554.00M |
| Operating Income | $1.03B |
| Interest Expense | $67.00M |
| Net Income | $567.00M |
| EPS (Basic) | $0.66 |
| EPS (Diluted) | $0.66 |
| Shares Outstanding (Basic) | 857.47M |
| Shares Outstanding (Diluted) | 862.20M |
Key Highlights
- 1Net earnings for the nine months ended September 30, 2015, decreased to $1.8 billion from $2.2 billion in the prior year, largely due to foreign currency translation effects and realized investment losses.
- 2The Japanese yen weakened significantly against the U.S. dollar, impacting reported revenues and net earnings for Aflac Japan, the company's primary operating segment.
- 3The company recorded $137 million ($89 million after-tax) in other-than-temporary impairment losses in the third quarter of 2015, primarily related to bank/financial institution bonds.
- 4Aflac Japan's sales of third sector products (cancer and medical) showed strong growth, up 27.1% year-to-date, driven by product enhancements and expanded distribution via Japan Post.
- 5Aflac U.S. reported a 3.0% increase in total operating revenues year-to-date, with a modest 1.1% increase in new annualized premium sales.
- 6The company redeemed $850 million of 8.50% senior notes and paid a $230 million make-whole premium, while also issuing $1.0 billion in new senior notes with lower interest rates.
- 7Shareholders' equity experienced a decline in unrealized gains on investment securities, from $4.7 billion at December 31, 2014, to $3.2 billion at September 30, 2015, largely due to market fluctuations.