Aflac Q1 Earnings Miss Estimates on Lower Japan Premiums

Core Viewpoint - Aflac Incorporated reported weaker-than-expected first-quarter 2025 results, with adjusted earnings per share (EPS) of $1.66, missing estimates by 1.2$4.3 billion, missing consensus by 1.3% [1][2] Financial Performance - Adjusted net investment income decreased by 2.2% year over year to $913 million [3] - Total net benefits and claims declined by 3.2$1.9 billion [3] - Total acquisition and operating expenses increased by 4.1% year over year to $1.3 billion [3] - Pre-tax earnings plummeted by 93.3$145 million [3] Segment Analysis - Aflac Japan: Adjusted revenues decreased by 8.1% year over year to $2.3 billion, missing estimates by 5.3$1.7 billion [4] - Aflac U.S.: Adjusted revenues increased by 1.3% year over year to $1.7 billion, but missed estimates by 1.4$1.4 billion [6] Investment and Capital Management - Aflac bought back 8.5 million shares worth $900 million in the first quarter, with 38.8 million shares remaining for buyback [11] - The company announced a dividend of 58 cents per share for the second quarter, payable on June 2, 2025 [11] Financial Position - As of March 31, 2025, total cash and cash equivalents decreased to$5.2 billion from $6.2 billion at the end of 2024 [8] - Total assets increased to$120.3 billion from $117.6 billion at the end of 2024 [8] - Adjusted debt increased to$7.5 billion from $7.2 billion at the end of 2024, with a debt to adjusted capitalization ratio of 20.7% [9] Future Outlook - Aflac anticipates improved sales in its Japan business for 2025, focusing on third-sector products and targeting younger customers [12] - The company expects a benefit ratio of 64-66% for Aflac Japan and 48-52% for Aflac U.S. in 2025 [13]