Aflac (AFL) Up 7.9% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Aflac's recent earnings report shows strong performance with adjusted earnings per share beating estimates and a notable increase in investment income, despite a slight decline in overall revenues [2][3]. Financial Performance - Aflac reported Q2 2024 adjusted earnings per share of $1.83, exceeding the Zacks Consensus Estimate by 15.1% and increasing 15.8% year over year [2]. - Revenues decreased from $5.2 billion to $5.1 billion year over year, but still surpassed the consensus mark by 17.4% [2]. - Adjusted net investment income rose 15.8% year over year to $1 billion [3]. - Total net benefits and claims decreased 8.4% year over year to $1.9 billion [3]. - Total acquisition and operating expenses fell 4.1% year over year to $1.2 billion [3]. Segment Performance - Aflac Japan: Adjusted revenues decreased 9.7% year over year to $2.4 billion, with total net earned premiums dropping 16.9% to $1.7 billion [4]. Adjusted net investment income increased 13.8% to $725 million [4]. - Aflac U.S.: Adjusted revenues increased 1.3% year over year to $1.7 billion, while total net earned premiums climbed 2.1% to $1.5 billion [5]. Adjusted net investment income rose 7.4% to $218 million [5]. Financial Position - As of June 30, 2024, Aflac had total cash and cash equivalents of $6.1 billion, up from $4.3 billion at the end of 2023 [7]. - Total assets decreased to $120.2 billion from $126.7 billion at the end of 2023 [7]. - Total shareholders' equity increased to $26 billion from $22 million at the end of 2023 [7]. - Adjusted book value per share rose 12.1% year over year to $52.26 [7]. Capital Deployment - Aflac repurchased 9.3 million shares worth $800 million in Q2 2024, with 59.2 million shares remaining for buyback [8]. - Management announced a dividend of 50 cents per share for Q3 2024, payable on September 2, 2024 [8]. Outlook - Aflac anticipates improved sales in its Japan business for 2024, focusing on third-sector products and younger customers [9]. - The company expects the benefit ratio in Aflac Japan to remain between 66-68% and in Aflac U.S. between 45-47% for 2024 [9]. - Expense ratios for Aflac Japan and U.S. are projected to stay within 19-21% and 38-40%, respectively [9].