Aflac Operating Profit Falls 14%

   By Tess Stynes 
 

Aflac Inc. (AFL) said its second-quarter operating earnings fell 14% as impacts from a weaker yen continued to weigh on the insurer's business in Japan.

Shares fell 2.1% to $61 in recent after-hours trading.

For the year, the company raised its per-share operating earnings estimate to between $5.88 and $6.17, from its previous estimate for per-share profit of $5.74 to $6.15.

For the current quarter, Aflac forecast per-share operating earnings of $1.40 to $1.53, while analysts polled by Thomson Reuters expected per-share profit of $1.48.

Core earnings are a widely watched benchmark for the insurance industry because they exclude realized capital gains and losses from companies' investment portfolios, among other items that aren't considered recurring in nature on a quarterly basis.

In the company's Japan business, on a yen basis, Aflac's premium income declined 1.2%, while total revenue was flat and segment pretax operating earnings declined 3.1%.

In U.S. dollar terms, Japan's premium income dropped 17%, while revenue fell 16% and pretax operating earnings declined 18%.

In the U.S. business, premium income increased 1.6%, while revenue increased 1.9%. Pretax operating earnings declined 2%.

Aflac reported an operating profit of $651 million, or $1.50 a share, down from $757 million, or $1.66 a share, a year earlier.

The company expected per-share earnings of about $1.46 to $1.57.

Revenue decreased 9.4% to $5.29 billion. Analysts polled by revenue of $5.24 billion.

Overall, Aflac reported a profit of $573 million, or $1.32 a share, down from $810 million, or $1.78 a share, a year earlier.

Write to Tess Stynes at [e-mail]

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