The weaker yen-dollar exchange rate hit Aflac’s net income in the third quarter. The company cited the stronger dollar in reporting that its third-quarter net income dropped 19.7 percent to $567 million from the year-ago period.
Aflac Japan is the company’s largest contributor to earnings. Third-quarter performance was “suppressed” by the 15 percent decline in the yen-dollar exchange compared with a year ago, Aflac said. The average yen-dollar exchange rate this quarter was 122.15 compared with the average rate of 103.92 during the third quarter of 2014.
The company also reported third-quarter net income of $1.32 per share diluted compared with $1.56 per share diluted in the year-ago period.
Adjusted for nonrecurring costs, the company also reported net income was $1.56 per share. This beat the average estimate of 12 analysts surveyed by Zacks Investment Research. Analysts estimated the company would earn $1.48 per share.
Revenue was $5.04 billion for the period, missing analysts’ forecast of $5.11 billion.
Third-quarter operating earnings were $672 million compared with $685 million in the year-ago period, the company also said.
Some bright spots were noted in the earnings report. Changes in Aflac U.S.’s career sales channel and “broker management infrastructure,” along with the restructuring of Aflac U.S.’s promise to pay eligible claims in one day, were beginning to yield results. That was the word from Aflac chairman and CEO Daniel P. Amos in a news release accompanying the earnings report.
“I am confident that during this year of building, these changes are laying the foundation for expanded long-term growth opportunities,” Amos said.
“Taking into account our results for the first nine months and our expectation for sales in the fourth quarter, we now anticipate Aflac U.S. will generate sales growth at the lower end of the 3 percent to 7 percent range for the year,” he also said.
Aflac’s board of directors also announced a 5.1 percent increase in the quarterly cash dividend payable in the fourth quarter.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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