Aflac (AFL) Q2 2024 earnings summary

Executive summary

• Q2 2024 net earnings rose to $1.8 billion ($3.10 per diluted share), up from $1.6 billion ($2.71), driven by higher net investment gains and improved operating performance.

• Adjusted EPS for Q2 increased 15.8% year-over-year to $1.83; adjusted EPS excluding FX impact rose 19.6%.

• Profitable growth was supported by new products, disciplined underwriting, and expense management in both Japan and the U.S.

• For the first half of 2024, total revenues increased to $10.6 billion, with net earnings up to $3.6 billion and adjusted EPS up 11.5% to $3.49.

• The board declared a Q3 dividend of $0.50 per share, continuing a 41-year streak of dividend growth.

Financial highlights

• Q2 total revenues were $5.1 billion, down slightly year-over-year; net earnings for Q2 were $1.8 billion, up 7.4% from $1.6 billion.

• Adjusted earnings for Q2 were $1.0 billion ($1.83/diluted share), up from $954 million ($1.58/diluted share) in Q2 2023.

• Adjusted book value per share at June 30, 2024 was $52.26, up 12.1% year-over-year.

• Annualized return on average shareholders' equity in Q2 was 28.3%; adjusted ROE excluding FX was 14.8%.

• Cash dividends per share increased 19% to $0.50 in Q2 2024.

Outlook and guidance

• Management expects higher expenses in Japan in H2 due to 50th anniversary promotions, with full-year expense ratio at the low end of 19%-21%.

• U.S. expense ratio expected within 38%-40% for the year, with higher Q4 expenses due to seasonality.

• Confident in achieving full-year U.S. sales guidance, anticipating stronger H2 performance.

• Effective tax rate on adjusted earnings for future periods expected to be approximately 20%.

• Management continues to monitor FX impacts and economic conditions, emphasizing currency-neutral performance.