Can Aflac Navigate Through Weak Japan Operations in Q4 Earnings?

Aflac Incorporated AFL is scheduled to report fourth-quarter 2024 results on Feb. 5, after the closing bell. The Zacks Consensus Estimate for earnings per share is pegged at $1.63, which indicates 30.4% growth from the prior-year quarter’s reported number. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Fourth-quarter earnings estimates have been revised downward in the past 60 days. Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $4.4 billion, indicating 17.4% growth from the year-ago quarter’s reported figure. Image Source: Zacks Investment ResearchAflac’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 8.1%. This is depicted in the chart below: Aflac Incorporated Price and EPS Surprise Aflac Incorporated price-eps-surprise | Aflac Incorporated QuoteQ4 Earnings Whispers for AFLOur proven model does not conclusively predict an earnings beat for Aflac this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.Earnings ESP: Aflac has an Earnings ESP of -1.54% because the Most Accurate Estimate of $1.60 per share is pegged lower than the Zacks Consensus Estimate of $1.63. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: AFL currently carries a Zacks Rank of 3.Factors to Note Ahead of AFL’s ResultsAflac’s revenue growth is anticipated to have been supported by strong contributions from its U.S. operations. This segment is expected to have been bolstered by an increase in net earned premiums and higher-yielding fixed-income investments. Premiums are likely to have gained on improved sales of Group Life Absent Management and Disability and individual voluntary benefits.The Zacks Consensus Estimate for net earned premiums for Aflac’s U.S. segment is pegged at $1.5 billion, indicating a 5.4% increase from the prior-year quarter’s figure. Additionally, the consensus mark for adjusted net investment income for the unit is pegged at $216.9 million, indicating 2.8% growth from the year-ago quarter’s number. Furthermore, expense ratios in both segments are expected to have improved due to prudent expense management efforts. In addition,, expense allowances from reinsurance agreements are likely to have boosted Aflac’s margins.On the other hand, Aflac’s Japan segment is expected to have suffered challenges due to a decline in net earned premiums. This drop is likely to have been due to a deterioration in paid-up policies. Nevertheless, solid persistency rates are likely to have provided an impetus to the segment’s quarterly results. The Zacks Consensus Estimate for net earned premiums of the unit is pegged at $1.8 billion, indicating a 3.3% decrease from the prior-year quarter’s figure, making an earnings beat uncertain.The consensus estimate for Aflac’s consolidated net earned premiums is pegged at $3.4 billion, indicating a slight increase from the prior-year quarter’s figure. The consensus estimate for total net investment income is $963 million, indicating 11.3% growth year over year.Stocks That Warrant a LookWhile an earnings beat looks uncertain for Aflac, here are some other companies worth considering from the broader finance space, as our model shows that these have the right combination of elements to post an earnings beat this time around:Kinsale Capital Group, Inc. KNSL has an Earnings ESP of +1.06% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Kinsale Capital’s bottom line for the to-be-reported quarter is pegged at $4.34 per share, implying year-over-year growth of 12.1%. KNSL beat earnings estimates in each of the past four quarters, with an average surprise of 9.4%.Rithm Capital Corp. RITM has an Earnings ESP of +2.22% and is a Zacks #2 Ranked player. The Zacks Consensus Estimate for Rithm Capital’s bottom line for the to-be-reported quarter is pegged at 45 cents per share, which remained stable over the past month. The consensus estimate for RITM’s revenues is pegged at $1.23 billion, indicating 73.2% growth from a year ago.Palomar Holdings, Inc. PLMR has an Earnings ESP of +0.27% and a Zacks Rank of 2.The Zacks Consensus Estimate for Palomar’s bottom line for the to-be-reported quarter is pegged at $1.24 per share, which remained stable in the past month. PLMR beat earnings estimates in each of the past four quarters, with an average surprise of 14.9%. Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aflac Incorporated (AFL): Free Stock Analysis Report Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis Report Palomar Holdings, Inc. (PLMR): Free Stock Analysis Report Rithm Capital Corp. (RITM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks