Earnings Preview For AFLAC (AFL)

AFLAC (NYSE: AFL) is expected to announce its Q1 earnings report after the bells ring on Wednesday, April 27. Analysts are predicting earnings per share to be $1.52, up from $1.41 a year ago. In the last week, the Q1 earnings estimate was reduced by $0.01.

AFLAC is the largest provider of supplemental insurance in the United States. Georgia-based company's principal business is supplemental health and life insurance. AFLAC operates in the United States (AFLAC U.S.) and as a branch in Japan (AFLAC Japan). The company's business consists of two segments: AFLAC Japan and AFLAC U.S. AFLAC Japan sells voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans and annuities. AFLAC U.S. sells voluntary supplemental insurance products, including loss-of-income products (life and short-term disability plans) and products designed to protect individuals from depletion of assets (hospital indemnity, fixed-benefit dental and vision care).

Fitch Ratings has recently upgraded its outlook to Stable from Negative, despite the fact that almost 77% of the company's operations are based in Japan, which was struck by a devastating tsunami, multiple earthquakes, and multiple nuclear reactor disasters. The rating agency said that it based its decision on AFLAC's strong credit quality and reduced exposure to perpetual preferred securities when compared to its peer group.

The problems in Japan will not, it seems, take too much out of AFLAC's revenues. For this quarter, analysts are projecting a rise of 10% on a yearly basis to $5.57 billion, with revenues expected to grow to $5.61 billion in the following quarter. For the whole year, revenues are predicted to be up by 8.7%, while earnings per share is expected to rise by 11.6%. AFLAC's results are even more impressive when compared with its competitors. Earnings per share for the industry is expected to be down 10.5% this year. Investors will be hoping strong Wednesday results will propel AFLAC's shares towards Barclays Capital's $66.00 price target.