Aflac (AFL) Q3 2024 earnings summary

Executive summary

• Adjusted earnings per diluted share rose 17.4% year-over-year to $2.16, while GAAP EPS showed a loss of $0.17 per share due to $1.4 billion in net investment and yen FX losses.

• Year-to-date adjusted EPS increased 13.5% to $5.64; Japan segment sales grew 12.3% and U.S. segment sales rose 5.5%, both driven by new products and channels.

• Total Q3 revenues were $2.9 billion, down 40.4% year-over-year, mainly due to FX and investment losses; net earnings were $(93) million.

• Board declared a Q4 dividend of $0.50 per share, marking 42 consecutive years of dividend increases.

• $500 million in share repurchases and $280 million in dividends paid in Q3; 54.3 million shares remain authorized for repurchase.

Financial highlights

• Adjusted earnings for Q3 were $1.2 billion, up 10.6% year-over-year; adjusted book value per share increased 7.3% to $51.21.

• Adjusted ROE reached 17.0% for Q3, while annualized return on average shareholders' equity was (1.5)% due to investment losses.

• Japan pretax margin was 44.7% for Q3, expected 35%-36% for the full year; U.S. pretax margin was 20.8%.

• Persistency in Japan at 93.3%, U.S. at 78.9%.

• Commercial real estate loan watch list at $1.0 billion, with less than $250 million in foreclosure; CECL reserves increased by $3 million.

Outlook and guidance

• Japan full-year benefit ratio expected at 62%-63%, lower than prior guidance due to assumption unlock; pretax margin expected at 35%-36%.

• U.S. full-year benefit ratio expected at the higher end of 45%-47% guidance; expense ratio to remain within 38%-40%.

• U.S. full-year net earned premiums expected at the lower end of 3%-5% guidance.

• Stable Tsumitasu sales expected through year-end; new product launches planned for next year.

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