Supplemental health insurance provider Aflac Inc. (AFL), Tuesday reported a higher fourth-quarter profit, as premiums and investment income grew in both Japan and the U.S., partly offset by currency losses due to a weak yen. Aflac's quarterly earnings came in line with Street estimates, while revenues missed expectations.
The company affirmed its operating earnings guidance for fiscal year 2013, but said the guidance may fall short in the event of a weakened yen.
Columbus, Georgia-based Aflac reported fourth-quarter net earnings of $581 million or $1.24 per share, compared with $538 million or $1.15 per share last year.
Excluding one-time gains and losses, operating earnings for the quarter were $697 million or $1.48 per share, compared with $684 million or $1.45 per share a year ago.
On average, 22 analysts polled by Thomson Reuters expected earnings of $1.48 per share for the quarter. Analysts' estimates typically exclude special items.
The weaker yen/dollar exchange rate decreased operating earnings by $0.04 per share for the quarter.
Revenues for the quarter increased 6.6 percent to $6.3 billion from $5.98 billion in the prior year. Ten analysts on consensus estimated revenues of $6.50 billion for the quarter.
Aflac U.S. revenues for the quarter rose 5.8 percent from last year. Premium income increased 5.5 percent, and net investment income was up 4.4 percent.
Japan revenues in Yen were up 10.5 percent. Premium income in yen rose 11.2 percent, benefiting from strong sales of WAYS, Aflac Japan's unique hybrid whole-life product. Net investment income increased 5.2 percent.
Aflac has favored U.S. corporate bonds over Japanese government debt to increase gains on the portfolio backing obligations in Japan, its biggest market.
During the quarter, Aflac repurchased 1.9 million of its common shares, and at the end of December, had 22.4 million shares available for repurchase.
For fiscal year 2013, Aflac is still targeting operating earnings of $6.86 to $7.06 per share, on a currency neutral basis. But if the yen/dollar exchange rate averages 90 yen for the year, operating earnings then will range between $6.37 and $6.57 per share.
Analysts expect the company to report earnings of $6.62 per share for fiscal 2013.
During the year, Aflac expects its U.S. sales to be flat to up 5 percent, and provided a similar outlook for its Japan sales of third sector cancer and medical products.
Aflac declared a quarterly cash dividend of $0.35 per share, payable March 1 to shareholders of record on February 15.
AFLAC is trading at $53.49, up 1.21%, on a volume of 3.7 million shares on the NYSE. In after hours, the stock dropped 1.85%. In the past year, the stock has traded in a range of $38.13 - $54.93.
by RTT Staff Writer
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