Aflac (AFL) Q3 2024 earnings summary

Executive summary

• Q3 2024 net loss was $93 million ($0.17 per diluted share), mainly due to $1.4 billion in net investment and FX losses, while adjusted EPS rose 17.4% to $2.16 and adjusted earnings increased 10.6% to $1.2 billion year-over-year.

• Year-to-date adjusted EPS increased 13.5% to $5.64, with strong sales momentum in Japan (12.3% growth, led by Tsumitasu) and the U.S. (5.5% growth in group life, absence management, and disability).

• Shareholders' equity rose to $24.8 billion ($44.60/share) at September 30, 2024, and the board declared a Q4 dividend of $0.50/share, marking 42 consecutive years of dividend increases.

• Adjusted ROE improved to 17.0% for Q3, despite a negative U.S. GAAP ROE of (1.5)%.

• The company repurchased $500 million in shares in Q3 and $2.1 billion year-to-date, with 54.3 million shares remaining authorized for repurchase.

Financial highlights

• Q3 2024 revenues were $2.9 billion, down 40.4% year-over-year, and net investment losses totaled $1.4 billion, compared to $423 million in gains a year ago.

• Adjusted book value per share rose 7.3% year-over-year to $51.21; book value per share was $44.60.

• Annualized return on average shareholders' equity for Q3 was (1.5)%; adjusted ROE excluding FX was 17.0%.

• Cash and cash equivalents at September 30, 2024, were $5.6 billion, up from $4.3 billion at year-end 2023.

• Cash returned to shareholders through repurchases and dividends was $2.9 billion for the nine months.

Outlook and guidance

• Japan full-year benefit ratio expected at 62%-63%, lower than prior guidance due to assumption unlock; U.S. full-year benefit ratio expected at the higher end of 45%-47%.

• Japan pre-tax margin guidance for full year: 35%-36%; U.S. expense ratio expected to remain within 38%-40%.

• Management remains committed to prudent liquidity and capital management, maintaining higher than historical levels of liquidity at the Parent Company.

• Tsumitasu sales expected to remain stable and continue attracting new, younger customers.

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