Author: Eddy Elfenbein
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After the bell, AFLAC (AFL) reported Q4 operating earnings of $1.07 per share. That beat Wall Street’s forecast of $1.05 per share. The yen/dollar exchange rate pinged earnings by two cents per share.
For the year, AFLAC made $4.96 per share. That’s up from $4.44 in 2019. For the full-year, forex added four cents per share to the bottom line. During the quarter, AFLAC bought back 11.8 million shares of AFL for $500 million.
At the end of the quarter, total shareholder equity was $48.46 per share. The annualized ROE on shareholders’ equity in Q4 was 11.5% and 15.3% for the full year.
The takeaway is that AFLAC had a very tough year in 2020. Given what they had to deal with, the company performed admirably. The recent 18% dividend hike reflects that.
CEO Dan Amos:
“Pandemic conditions continue to impact our sales results both in the United States and Japan, as well as earned premium and revenues. We expect these pandemic conditions to remain with us through the first half of 2021. We have seen marginal sales improvements on a sequential basis in the last two quarters, and we would look for this to continue if conditions improve to allow more face-to-face interactions. At the same time, we continue to invest in virtual and digital sales methods and promote new products, as we face uncertain economic conditions and claims activity in both countries. For example, we launched a new medical product in Japan, closed on the acquisition of Zurich North America’s group benefits business and announced the national launch of Aflac Dental & Vision. While we will continue to monitor the rollout of vaccines, we remain encouraged about the second half of the year, expecting to slowly return to normal and realize the benefits of our 2020 investments.
“As always, we are committed to prudent liquidity and capital management. This includes maintaining strong capital ratios on behalf of our policyholders in both the U.S. and Japan. It goes without saying that we treasure our record of dividend growth. Coming off our 38th consecutive year of dividend increases, I am pleased with the board’s decision to increase the quarterly dividend by 17.9% in the first quarter, as we announced in November. Our dividend track record is supported by the strength of our capital and cash flows. At the same time, we remain in the market repurchasing shares with a tactical approach and focused on integrating the growth investments we have made in our platform. By doing so, we look to emerge from this period in a continued position of strength and leadership.”