AFLAC Third Quarter Earnings

By Investopedia Staff | October 23, 2012 AAA

AFLAC Incorporated (NYSE:AFL) announced its results for the most recent quarter on October 23, 2012. Aflac, a general business holding company, provides supplemental health and life insurance through its subsidiaries in the United States and Japan.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: 12 Things You Need To Know About Financial Statements

The Numbers: AFLAC managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported $2.16 per share versus the $1.61 per share estimate and revenues of $6.85 billion versus the $6.28 billion estimate. EPS rose 37.6% while revenue climbed 14.4% from the same period last year. AFLAC has averaged revenue growth of 15.2% over the past five quarters. The company's net income for the quarter was $1.02 billion. According to the reported number, this is up 38.2% from last year's figures.

Management Quote: Commenting on the company's third quarter results, Chairman and Chief Executive Officer Daniel P. Amos stated, "We remain pleased with Aflac's financial performance for the first nine months of 2012. Aflac Japan had another impressive quarter, continuing tremendous sales momentum, especially through the bank channel. Aflac Japan's third quarter production came in much stronger than we expected and set an all-time record for new annualized premium sales for the fifth quarter in a row. Keep in mind, we continue to face tougher sales comparisons in the fourth quarter."

Looking Ahead: Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the fourth quarter has moved down from $1.65 a share to $1.62 over the last 90 days. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. For the fiscal year, the average estimate has moved up from $6.49 a share to $6.55 over the last ninety days.

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