NYSE$AFL

Aflac Inc · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Aflac's Q3 2020 earnings were released, showing a significant increase in net earnings due to a tax benefit from new regulations.

Aflac Incorporated reported a strong third quarter with total revenues of $5.7 billion and net earnings of $2.5 billion, significantly impacted by a $1.4 billion tax benefit. Adjusted earnings were $994 million, reflecting a 15.2% increase driven by favorable effective tax rates.

  • Total revenues increased to $5.7 billion compared to $5.5 billion in the third quarter of 2019.
  • Net earnings rose to $2.5 billion, or $3.44 per diluted share, compared to $777 million, or $1.04 per diluted share a year ago, benefiting from new tax regulations.
  • Adjusted earnings increased by 15.2% to $994 million, driven primarily by favorable effective tax rates.
  • Aflac Japan's net premium income decreased by 2.3% to $3.2 billion, while Aflac U.S. net premium income declined by 2.6% to $1.4 billion.

Headline financials

Total Revenue

$5.67B

Previous: $5.54B+2.3%
EPS (adj)

$1.39

Previous: $1.16+19.8%
Annualized ROE

31.7%

No prior period
Free Cash Flow

$2.46B

Previous: $777M+216.1%
Net Income

$2.46B

Previous: $777M+216.1%
Operating Income

$1.04B

Previous: $1.16B-10.3%
Gross Profit

$2.39B

Previous: $2.19B+8.9%
Cash & Equivalents

$146B

Previous: $4.22B+3365.4%
Total Assets

$161B

Previous: $154B+4.4%

Revenue & EPS history

Aflac · Revenue · Quarterly

$5.67B

Q3 2020+2.3%vs Q3 2019
Beat estimate in 16 of 16 quarters(100%)
ActualEstimate

Revenue by segment

Aflac · $5.07B total across 3 segments · Q1 2022

  • Aflac Japan Revenue
    $3.4B
  • Aflac U.S. Revenue
    $1.6B
  • Corporate and Other Revenue
    $74M-10.8%

Forward guidance

Aflac anticipates COVID-19 will continue to impact sales results in the United States and Japan. The company expects a modest sales improvement for the remainder of the year, contingent upon the pace of economic recovery.

Tailwinds

  • Aflac is taking actions to navigate the pandemic in Japan and the U.S.
  • The company is implementing a tactical approach to product development.
  • Aflac is investing in distribution platforms.
  • The company is promoting wellness benefits with policyholders in the U.S.
  • Aflac is accelerating investment in automation and digital roadmaps.

Headwinds

  • The environment created by COVID-19 continues to impact sales results both in the United States and Japan.
  • Economic conditions and claims activity within this environment remain uncertain in both the Japan and the U.S. as both countries address the pandemic.
  • Aflac expects COVID-19 to significantly affect full year sales results in both countries.
  • The voluntary separation plan will result in a one-time expense of approximately $45 million in the fourth quarter.
  • Activities represent short-term headwinds to pretax profit margins.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+0.6%

Avg return

Earnings day

-0.1%

Avg return

5 days after

+1.7%

Avg return

30 days after

63%

46 / 73 earnings

Positive

+9.4%

Q1 2012

Best reaction

-11.1%

Q4 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.6%-1.5%-3.3%
Q4 2025+3.4%+2.0%-2.1%
Q3 2025+2.3%+4.4%+0.4%
Q2 2025+3.4%+5.3%+8.1%
Q1 2025-4.7%-2.6%-4.7%
Q4 2024-3.9%-4.0%+1.0%
Q3 2024-4.7%-5.0%+3.6%
Q2 2024+6.6%+1.9%+15.7%
Q1 2024+0.5%+1.3%+7.4%
Q4 2023-11.1%-11.0%-6.2%
Q3 2023+4.6%+4.2%+5.8%
Q2 2023+5.4%+6.2%+3.1%
Q1 2023+5.6%+7.0%-1.9%
Q4 2022-6.3%-5.3%-6.9%
Q3 2022+3.1%+3.7%+11.0%
Q2 2022+2.5%+3.7%+3.7%
Q1 2022-2.5%-5.7%-0.6%
Q4 2021+1.4%+3.8%-4.4%
Q3 2021-3.1%-4.0%-2.7%
Q2 2021+3.4%+1.7%+6.1%
Q1 2021+1.3%+1.8%+5.9%
Q4 2020-1.2%-0.1%+7.9%
Q3 2020-7.1%-7.7%+24.0%
Q2 2020+0.2%-2.4%+1.2%
Q1 2020-1.5%-5.4%-3.5%
Q4 2019+2.4%+1.8%-20.1%
Q3 2019+1.5%+2.1%+2.9%
Q2 2019-0.1%-1.9%-10.3%
Q1 2019+1.3%+3.0%+6.4%
Q4 2018+1.2%+1.8%+3.8%
Q3 2018-4.7%-4.5%+0.5%
Q2 2018+5.8%+6.3%+6.6%
Q1 2018+1.1%+0.9%+0.4%
Q4 2017+1.3%-2.7%-1.2%
Q3 2017-1.1%-0.9%+0.5%
Q2 2017+2.6%+4.6%+4.6%
Q1 2017+0.1%+0.3%+0.1%
Q4 2016-4.5%-2.5%+2.6%
Q3 2016-1.8%-2.0%+2.8%
Q2 2016-1.5%-2.4%-0.8%
Q1 2016+2.1%
Q4 2015-1.2%
Q3 2015+0.7%
Q2 2015+4.9%
Q1 2015-0.2%
Q4 2014+4.3%
Q3 2014+1.9%
Q2 2014-3.6%
Q1 2014+1.4%
Q4 2013+1.7%
Q3 2013-2.2%
Q2 2013+1.1%
Q1 2013+3.7%
Q4 2012-3.2%
Q3 2012-1.5%
Q4 2011+4.2%
Q2 2012-2.7%
Q1 2012+9.4%
Q3 2011-0.1%
Q2 2011-10.8%
Q1 2011+1.9%
Q4 2010+2.9%
Q3 2010-1.2%
Q2 2010+0.3%
Q1 2009+7.5%
Q1 2010+1.8%
Q4 2007+1.7%
Q4 2009+1.7%
Q3 2009+3.1%
Q3 2008+3.1%
Q2 2008+2.9%
Q4 2008+2.9%
Q2 2009+2.9%

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