10-QPeriod: Q1 FY2019

AFLAC INC Quarterly Report for Q1 Ended Mar 31, 2019

Filed April 26, 2019For Securities:AFL

Summary

Aflac Incorporated reported solid financial results for the first quarter of 2019. Net earnings increased significantly to $928 million, or $1.23 per diluted share, compared to $717 million, or $0.91 per diluted share, in the same period of 2018. This growth was driven by an increase in net investment income and a favorable turn in realized investment gains/losses compared to the prior year. The company's balance sheet remains robust, with total assets growing to $145.7 billion. Investments, the largest asset category, increased to $131.4 billion, reflecting continued strategic asset allocation. Policy liabilities also saw a modest increase, indicating stable business operations. Aflac also continued its commitment to returning capital to shareholders, repurchasing $490 million of common stock and increasing its quarterly dividend per share.

Financial Highlights

33 data points
Beta

Revenue

$5.66B

Net Income

$928.00M

16.4% Net Margin

EPS (Diluted)

$1.23

Total Assets

$145.68B

Cash & Equivalents

$3.89B

Free Cash Flow

$1.54B

Financial Statements
Beta
Revenue$5.66B
SG&A Expenses$719.00M
Operating Income$1.14B
Interest Expense$58.00M
Net Income$928.00M
EPS (Basic)$1.23
EPS (Diluted)$1.23
Shares Outstanding (Basic)751.42M
Shares Outstanding (Diluted)755.79M

Key Highlights

  • 1Net earnings increased by 29.4% to $928 million for the three months ended March 31, 2019, compared to $717 million for the same period in 2018.
  • 2Diluted earnings per share rose to $1.23 from $0.91 year-over-year.
  • 3Total revenues grew to $5.66 billion, up from $5.46 billion in the prior year's first quarter.
  • 4Net investment income increased to $878 million from $837 million.
  • 5The company saw a significant positive swing in realized investment gains/losses, reporting $71 million in gains compared to $134 million in losses in the prior year.
  • 6Aflac Incorporated repurchased $490 million of its common stock during the quarter.
  • 7The quarterly dividend per share was increased to $0.27 from $0.26.

Frequently Asked Questions

The primary driver for the increase in net earnings was a combination of higher net investment income and a significant improvement in realized investment gains and losses, moving from a net loss in the prior year to a net gain in the current quarter.

The company's investment portfolio, comprising the largest portion of its assets, grew to $131.4 billion. Net investment income increased, and the company reported realized investment gains, a positive shift from the prior year's losses, indicating a generally favorable investment environment for Aflac during the period.

Aflac demonstrated its commitment to returning capital to shareholders by repurchasing $490 million of its common stock during the quarter and increasing the quarterly dividend per share to $0.27. This suggests a strategy of actively managing its capital structure and rewarding its investors.

Aflac Japan remains the principal contributor to consolidated earnings. While net premium income in yen decreased slightly, the segment's pretax adjusted earnings increased due to higher net investment income and a favorable benefit ratio. The company continues to focus on third sector products like cancer and medical insurance in Japan, which are less interest-rate sensitive.