Can Aflac Navigate Through Weak Japan Operations in Q4 Earnings?

Core Viewpoint - Aflac Incorporated (AFL) is set to report its fourth-quarter 2024 results on February 5, with earnings per share (EPS) expected to grow by 30.4% year-over-year to $1.63, while revenue is projected to reach $4.4 billion, reflecting a 17.4% increase from the previous year [1][2]. Earnings Estimates - The Zacks Consensus Estimate for Aflac's EPS is $1.63, with a downward revision trend observed over the past 60 days [2][3]. - The current estimates for the first and second quarters of the following fiscal year are $1.71 and $7.02, respectively, with slight revisions noted [3]. Revenue and Premiums - Aflac's U.S. segment is expected to contribute significantly to revenue growth, with net earned premiums estimated at $1.5 billion, indicating a 5.4% increase year-over-year [8][9]. - The total consolidated net earned premiums are projected at $3.4 billion, showing a slight increase from the prior-year quarter [12]. Investment Income - The consensus estimate for adjusted net investment income for Aflac's U.S. segment is $216.9 million, reflecting a 2.8% growth from the previous year [9]. - Total net investment income for Aflac is estimated at $963 million, indicating an 11.3% year-over-year growth [12]. Segment Performance - The Japan segment is anticipated to face challenges, with net earned premiums expected to decline by 3.3% to $1.8 billion due to a decrease in paid-up policies [11]. - Despite the challenges in Japan, strong persistency rates may provide some support to the segment's performance [11]. Expense Management - Improved expense ratios in both segments are expected due to effective expense management, along with benefits from reinsurance agreements that may enhance Aflac's margins [10].