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Aflac (AFL) Earnings Miss, Revenues Beat Estimates in Q4

Aflac Incorporated 's AFL fourth-quarter 2016 operating earnings per share of $1.54 missed the Zacks Consensus Estimate of $1.64 by about 6.1% and also decreased 1.3% year over year. The downside was attributable to reserve adjustment of $.08 per diluted share compared with $1.56 in the last-year quarter.Aflac's operating earnings per share for full-year 2016 were $6.79, up 10.4% year over year.

Total revenue increased 12% to $6.0 billion in the fourth quarter on a year over year basis. The top line also surpassed the Zacks Consensus Estimate of $5.8 billion. For 2016, total revenue grew 8.1% year over year to $22.6 billion.

In the fourth quarter, total acquisition and operating expenses increased 20.3% to $1.54 billion, while benefits and claims rose 11.4% to $3.3 billion, both on a year-over-year basis.

Detailed Analysis

Aflac Japan : Premium income inched up 2%, investment income decreased 7.6%, total revenue was down 1.1% in the fourth quarter, all on a year-over-year basis. Pre-tax operating profit margin decreased to 19.4% from 22.3% in the prior year.

Aflac U.S.: Premium income increased 2.2% to $1.4 billion in the fourth quarter. Net investment income was up 4.0% to $177 million. Total revenue increased 2.6% to $1.5 billion. Pre-tax operating earnings were $262 million, up 10.4% year over year.

Aflac Incorporated Price, Consensus and EPS Surprise

Aflac Incorporated Price, Consensus and EPS Surprise | Aflac Incorporated Quote

Financial Update

As of Dec 31, 2016, total investment and cash increased 9.9% year over year to $116.4 billion. Shareholders' equity was up 15.7% year over year to $20.5 billion.

Dividend Update

Aflac's board of directors declared first-quarter 2017 cash dividend of $.43 per share, which is payable on Mar 1, 2017, to shareholders on record at the close of business on Feb 15, 2017.

Share Repurchase Update

In the fourth quarter, Aflac bought back common shares worth $200 million. In 2016, it repurchased common shares worth $1.4 billion. At the end of Dec 2016, Aflac had 26.8 million of shares available for buyback under its share repurchase authorization.

2017Guidance

Aflac expects to produce operating earnings per diluted share of $6.40 to $6.65.

Management anticipates that Aflac will repurchase shares worth $1.3-$1.5 billion in 2017.

Zacks Rank

Currently, Aflac has a Zacks Rank #5 (Sell).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Performance of Other Insurers

Among the other players from the insurance industry that have reported their fourth-quarter earnings so far, the bottom line at Brown & Brown Inc. BRO , MGIC Investment Corporation MTG and The Travelers Companies, Inc. TRV beat their respective Zacks Consensus Estimate.

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Aflac Incorporated (AFL): Free Stock Analysis Report

Brown & Brown, Inc. (BRO): Free Stock Analysis Report

MGIC Investment Corporation (MTG): Free Stock Analysis Report

The Travelers Companies, Inc. (TRV): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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