Aflac Keeps Its Real

I like this stock. I really do:

Aflac Inc., the world’s largest seller of supplemental health insurance, said third-quarter profit more than tripled as investment losses narrowed and a stronger yen magnified revenue from Japan.
Net income rose to $363 million, or 77 cents a share, from $100 million, or 21 cents, in the same period a year earlier, the Columbus, Georgia-based insurer said today in a statement. Operating income, which excludes some investment results, was $1.25 a share, beating the $1.20 average estimate of 17 analysts surveyed by Bloomberg. The stronger yen boosted quarterly profit by 9 cents a share, Aflac said.
Aflac, which gets most of its revenue from Japan, is counting on earnings there and in the U.S. to support capital as the recession pressures the value of investments held to back policies. Chief Executive Officer Daniel Amos is diversifying holdings to reduce potential losses from defaults. Realized investment losses in the third quarter shrank 42 percent to $226 million from a year earlier, Aflac said today.
“They’re still working through some of their issues, but the results look pretty impressive,” said Bill Smead, who helps manage $160 million, including Aflac shares, as chief investment officer of Seattle-based Smead Capital Management. “It’s the beginning of a long process” of improving earnings.

So I guess the world wasn’t really going to end for them a few months ago. My only concern is that I didn’t load up when the shares were at $11.
The CEO said they’re on track to make $4.75 to $4.83 a share for this year and their objective is to grow earnings 9% to 12% next year. That’s roughly $5.20 to $5.40 a share. Not bad for a stock going for $42.

Posted by on October 29th, 2009 at 10:44 am

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