Aflac Q4 Earnings Miss Estimates on Lower Japan Net Premiums Earned

Core Viewpoint - Aflac Incorporated reported mixed fourth-quarter 2024 results, with adjusted earnings per share (EPS) of $1.56, missing estimates but showing a year-over-year increase of 24.8% [1][2] Financial Performance - Revenues rose from $3.8 billion in the previous year to $4.3 billion, although this was a 2.7% miss against consensus estimates [2] - Adjusted net investment income increased by 21% year over year to $962 million [5] - Total net benefits and claims decreased by 8.6% year over year to $1.9 billion [5] - Total acquisition and operating expenses fell by 2.9% year over year to $1.3 billion [5] Segment Analysis - Aflac Japan: Adjusted revenues decreased by 5.6% year over year to $2.4 billion, missing estimates by 4.2%. Total net earned premiums dipped by 8.2% to $1.7 billion [6] - Aflac U.S.: Adjusted revenues increased by 2% year over year to $1.7 billion, but missed estimates by 2.5%. Total net earned premiums rose by 2.7% to $1.4 billion [8] Full-Year Update - Adjusted EPS for 2024 improved by 15.7% to $7.21, while total revenues rose by 1.2% to $18.9 billion [10] - Net earned premiums decreased by 4.8% to $13.4 billion, but adjusted net investment income increased by 12.1% to $3.9 billion [10] Financial Position - As of December 31, 2024, total cash and cash equivalents increased to $6.2 billion from $4.3 billion at the end of 2023 [11] - Total assets fell to $117.6 billion from $126.7 billion at the end of 2023 [11] - Adjusted debt rose to $7.2 billion from $6.8 billion at the end of 2023, with a stable adjusted debt to adjusted capitalization ratio of 19.7% [12] Capital Deployment - Aflac repurchased 7 million shares worth $750 million in the fourth quarter, with 47.3 million shares remaining for buyback [14] - Management announced a dividend of 58 cents per share for the first quarter, payable on March 3, 2025 [14] Outlook - Aflac anticipates improved sales in its Japan business for 2025, focusing on third-sector products and targeting younger customers [15] - The company expects a benefit ratio of 64-66% for Aflac Japan and 48-52% for Aflac U.S. in 2025 [16]