Aflac Gears Up for Q2 Earnings: Ready to Quack or Set to Crack?

Core Viewpoint - Aflac Incorporated (AFL) is expected to report a decline in both earnings and revenues for the second quarter of 2025, with earnings estimated at $1.71 per share and revenues at $4.43 billion, reflecting year-over-year decreases [1][7]. Financial Estimates - The second-quarter earnings estimate has decreased by 2 cents over the past 60 days, indicating a year-over-year decline of 6.6% [2]. - The Zacks Consensus Estimate for total revenues in the second quarter suggests a year-over-year decrease of 13.7% [2]. - For the full year 2025, the revenue estimate is $17.68 billion, implying a 0.9% decline year over year, while the EPS estimate is $6.75, indicating a 6.4% year-over-year decline [3]. Earnings Performance - Aflac has beaten earnings estimates in two of the past four quarters and missed twice, with an average surprise of 9.3% [3]. - The current Earnings ESP is -1.25%, and the Zacks Rank is 2 (Buy), suggesting uncertainty regarding an earnings beat this quarter [4]. Factors Influencing Q2 Results - Expected premium growth may be offset by lower earnings from Japan and weaker investment income [7]. - The consensus estimate for total net earned premiums indicates a 3.4% year-over-year increase, while the Aflac U.S. unit is expected to see a 3.3% increase in adjusted revenues, contrasting with a 2.6% decline in the Aflac Japan unit [8]. - Net investment income is projected to decline by 17.2% year over year [9]. - The total benefit to premium ratio for Aflac U.S. is expected to rise to 47.8 from 46.7 a year ago, while Aflac Japan's ratio is expected to decrease to 65.3 from 66.9 [9]. - Pre-tax adjusted earnings from Aflac U.S. are estimated to fall by 8.1%, and Aflac Japan is likely to see a 13.2% decline [9][10]. Peer Performance - Marsh & McLennan reported adjusted earnings of $2.72 per share, surpassing estimates by 2.3% due to strong growth in Risk and Insurance Services [11]. - AON reported adjusted earnings of $3.49 per share, beating estimates by 2.7%, benefiting from new business growth and solid retention rates [12]. - AMERISAFE reported adjusted earnings of 53 cents per share, missing estimates by 3.6%, affected by a drop in net investment income and elevated expenses [13].