Aflac Inc.'s (AFL) first-quarter net income rose 20% as the
supplemental insurer increased its income in its U.S. and Japanese
businesses and was able to manage its net investment losses for the
quarter.
Meanwhile, the company issued second-quarter guidance slightly
below analysts' expectations.
Aflac's stock has been recovering during the recent broad market
rally, particularly after Standard & Poor's recently said the
company's ratings were no longer on watch for a downgrade. However,
analysts remain concerned about the company's concentration in
perpetual debentures, which are hybrid securities that combine
elements of equity and debt, largely issued by European banks.
The company reported first-quarter net income of $569 million,
or $1.22 a share, up from $474 million, or 98 cents a share, a year
earlier.
The latest results included investment losses of 1 cent a share,
compared with investment losses of 1 cent a share a year
earlier.
Revenue rose 13% to $4.82 billion.
Analysts polled by Thomson Reuters expected earnings of $1.16 a
share on revenue of $4.77 billion.
Premium income in yen grew by 3.6% in the company's large
Japanese operations. Reflecting the stronger yen, premium income in
dollars increased 17% to $3 billion.
Aflac U.S. posted a 5% increase in total premium income to $1.1
billion. Total revenue in the U.S. grew by 4.7% to $1.2
billion.
The company also reiterated that it expects 2009 sales in the
U.S. and Japan to be flat to up 5%.
Meanwhile, Aflac also said that it expects 2009 operating
earnings per share to be at the low end of its target of 13% to 15%
growth target, assuming the same average exchange rate as last
year. An increase of 13% in operating earnings equates to $4.51 a
share.
The company previously said it expected 2009 earnings of $4.51
to $4.59, excluding the effect of the yen.
For the second quarter, Aflac expects operating earnings of
$1.11 to $1.14 a share, slightly below analysts' latest estimate
for earnings of $1.15.
Shares closed Wednesday at $29.13 and rose 0.8% to $29.36 in
after-hours trading.
-By Jennifer Hoyt, Dow Jones Newswires; 201-938-2474;
jennifer.hoyt@dowjones.com