Research Desk Line-up: CNO Financial Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 13, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Aflac Inc. (NYSE: AFL), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=AFL, following the Company's posting of its third quarter fiscal 2017 operating results on October 25, 2017. The insurer exceeded earnings estimates, and the Company also raised its operating earnings outlook for 2017. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Accident & Health Insurance industry. Pro-TD has currently selected CNO Financial Group, Inc. (NYSE: CNO) for due-diligence and potential coverage as the Company announced on October 25, 2017, its financial results for Q3 2017. Register for a free membership today, and be among the early birds that get access to our report on CNO Financial when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on AFL; also brushing on CNO. With the links below you can directly download the report of your stock of interest free of charge at:
http://protraderdaily.com/optin/'symbol=AFL
http://protraderdaily.com/optin/'symbol=CNO
Earnings Reviewed
Aflac's total revenues were $5.5 billion during Q3 2017 compared to $5.7 billion in Q3 2016.
For Q3 2017, Aflac's operating earnings were $676 million compared to $713 million in Q3 2016. The decrease in operating earnings primarily reflected the impact of a weaker yen in the reported quarter. The Company's operating earnings per diluted share decreased 2.3% to $1.70 per diluted share in Q3 2017, and included an after-tax benefit from the reserve adjustment of $0.04 per diluted share, compared to $1.74 in Q3 2016.
Aflac's net earnings were $716 million, or $1.80 per diluted share, for Q3 2017 compared to $629 million, or $1.53 per diluted share in Q3 2016. The increase in net earnings in the reported quarter reflected net realized investment gains of $71 million, or $0.18 per diluted share, on a pretax basis, compared with pretax net losses of $130 million, or $0.32 per diluted share in the year-ago same period. The Company's earnings, adjusted for non-recurring gains, totaled $1.70 per share, beating analysts' expectations of $1.62 per share.
Geographic Results
AFLAC JAPAN - During Q3 2017, total new annualized premium sales decreased 10.5% to ¥23.7 billion, or $214 million. Third sector sales, which included cancer, medical, and income support products, increased 2.1% to ¥22.1 billion in the reported quarter. Total first sector sales, which included products such as WAYS and child endowment, were down 66.7% in the quarter, reflecting the Company's actions to reduce sale of first sector's savings products that are more interest-sensitive.
In yen terms, Aflac Japan's premium income, net of reinsurance, decreased 3.5% in Q3 2017 to ¥355.3 billion, with growth in third sector premium more than offset by an anticipated reduction in first sector premium due to savings products reaching premium paid-up. The segment's net investment income, net of amortized hedge costs, increased 1.1% to ¥62.5 billion on a y-o-y basis, primarily due to the foreign currency impact of US dollar-denominated investments. Total revenues were down 2.8% to ¥419.0 billion in Q3 2017. Pretax operating profit margin for the Japan's segment was 19.9% in the reported quarter compared to 19.6% in the prior year's same quarter.
Aflac Japan's growth rates in dollar terms for the third quarter were suppressed as a result of the weaker yen/dollar exchange rate. Premium income, net of reinsurance, decreased 11.0% to $3.2 billion in Q3 2017. The division's net investment income, net of amortized hedge costs, decreased 7.6% to $561 million. Total revenues declined by 10.5% to $3.8 billion, while pretax operating earnings declined 9.6% to $748 million.
AFLAC US - During Q3 2017, Aflac US premium income increased 2.1% to $1.4 billion. The segment's net investment income was up 2.8% to $181 million. Aflac US's total revenues increased 2.1% to $1.6 billion. The pretax operating profit margin for the US segment was 20.1% compared to 20.9% in the year-ago same period, while Pretax operating earnings in the reported quarter were $316 million, down 2.2% on a y-o-y basis, reflecting elevated investment in the platform.
Aflac US total new annualized premium sales increased 7.5% in Q3 2017 to $348 million. Persistency in the reported quarter came in at 77.7% compared to 76.9% in the year-earlier corresponding quarter.
Cash Matters
Aflac's total investments and cash at the end of September 2017 were $122.5 billion compared to $121.9 billion at June 30, 2017.
During Q3 2017, Aflac repurchased $219 million, or 2.7 million of its common shares. For the first nine months of the year, the Company purchased $1.0 billion, or 13.9 million of its common shares. At the end of September, Aflac had 53.0 million shares available for purchase under its share repurchase authorizations.
Aflac's shareholders' equity was $22.0 billion, or $55.80 per share, at September 30, 2017, compared to $22.8 billion, or $55.84 per share, at September 30, 2016. The annualized return on average shareholders' equity in Q3 2017 was 13.2%.
Aflac's Board of Directors announced a 4.7% increase in the quarterly cash dividend, effective with the fourth quarter payment and marks the 35th consecutive year of increase in the Company's cash dividend. The fourth quarter dividend of $0.45 per share is payable on December 01, 2017, to shareholders of record at the close of business on November 15, 2017.
Outlook
Aflac is forecasting Aflac Japan long-term growth rate in the range of 4% to 6% through 2019. The Company is anticipating long-term growth rate of 3% to 5% in new annualized premium sales through 2019 in Aflac US. Aflac reiterated that it will repurchase between $1.3 billion to $1.5 billion of its shares in 2017.
Aflac upwardly revised its operating earnings per diluted share outlook for 2017 from a range of $6.40 to $6.65 to a higher range of $6.75 to $6.95, both of which excluded the impact of the yen. The Company stated that if the yen averages ¥110 to ¥115 to the dollar for Q4 FY17, then it would expect operating earnings to be approximately $1.42 to $1.66 per diluted share in the upcoming quarter, making FY17 operating earnings approximately $6.62 to $6.86 per diluted share.
Stock Performance
On Friday, November 10, 2017, the stock closed the trading session at $83.44, slightly down 0.76% from its previous closing price of $84.08. A total volume of 1.18 million shares have exchanged hands. Aflac's stock price surged 2.70% in the last three months, 13.17% in the past six months, and 13.91% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 19.89%. The stock is trading at a PE ratio of 12.12 and has a dividend yield of 2.16%. At Friday's closing price, the stock's net capitalization stands at $33.06 billion.
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