The Slumping Yen and AFLAC

I wanted to add a quick work about AFLAC ($AFL) and the falling yen. Since AFLAC does most of its business in Japan, the company’s profits are impacted by the yen/dollar exchange rate. Lately, the dollar has been crushing the yen.

Basically, the stronger the yen is, the better it is for AFLAC. Conversely, a weak yen is bad for AFLAC. I should add that I don’t see AFLAC as a yen play. I prefer to look at their “currency neutral” results. But the fact is that the weaker yen will take a bite out of earnings.

Very roughly, every one yen above 80 yen to the dollar knocks five cents per share off of AFLAC’s annual earnings. The WSJ quotes Morgan Stanley’s Ron Leven who says the exchange rate will hit 90 in the first half of 2013.

Posted by on December 26th, 2012 at 12:08 pm

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