Summary
Aflac Incorporated reported strong financial results for the first quarter of 2018, with net earnings increasing to $717 million, or $0.91 per diluted share, up from $592 million, or $0.73 per diluted share, in the same period of the prior year. This growth was driven by higher net premiums and net investment income, partially offset by an increase in acquisition and operating expenses. The company also benefited from a lower effective income tax rate due to the Tax Cuts and Jobs Act enacted in late 2017. Aflac Japan remains the primary contributor to consolidated earnings, with its pretax adjusted earnings increasing to $818 million. The company continued its share repurchase program, returning capital to shareholders. Notable for investors is the ongoing conversion of Aflac Japan from a branch to a legal subsidiary, completed on April 1, 2018, which is expected to provide enhanced flexibility in capital management and business development. The company also experienced favorable claims development in its Japanese health products, largely attributed to improved treatment patterns leading to shorter hospital stays. Investors should monitor the impact of ongoing foreign currency fluctuations, particularly the strengthening yen, on reported results.
Financial Highlights
33 data points| Revenue | $5.46B |
| SG&A Expenses | $733.00M |
| Operating Income | $1.11B |
| Interest Expense | $56.00M |
| Net Income | $717.00M |
| EPS (Basic) | $0.92 |
| EPS (Diluted) | $0.91 |
| Shares Outstanding (Basic) | 778.55M |
| Shares Outstanding (Diluted) | 783.85M |
Key Highlights
- 1Net earnings increased to $717 million ($0.91 per diluted share) from $592 million ($0.73 per diluted share) in Q1 2017.
- 2Aflac Japan continues to be the main profit driver, with pretax adjusted earnings rising to $818 million.
- 3The company successfully completed the conversion of its Japan branch to a legal subsidiary on April 1, 2018, anticipating enhanced capital management flexibility.
- 4Favorable claims development in Japan, particularly for core health products, contributed positively to results.
- 5The effective income tax rate decreased due to the Tax Cuts and Jobs Act, which lowered the U.S. federal corporate income tax rate to 21%.
- 6The company repurchased $296 million of its common stock in the open market during the quarter.
- 7The yen strengthened against the U.S. dollar, impacting the reported results of Aflac Japan.