Supplemental insurer Aflac saw its net income sink by more than half in the second quarter, weighed down by soured investments in Europe it had previously disclosed.
On an operating basis, however, Aflac bettered its performance over last year's April-June quarter.
The Columbus-based insurer reported net income of $280 million, or 60 cents per diluted share, compared to $581 million, or $1.23 per share in the second quarter last year.
Aflac said soured investments in European financial institutions resulted in a $668 million pretax loss for the quarter.
So far this year, Aflac, which sells products such as cancer insurance and supplemental life insurance, has suffered more than $1 billion in losses related to financial institutions in Greece, Portugal, Spain and Ireland.
Operating earnings, excluding one-time charges like the soured investments, were $733 million, up 14.3 percent. On a per share basis, operating earnings were $1.56 vs. $1.35 a year ago, beating analysts’ expectations of $1.54, according to Bloomberg.
Aflac saw a boost in Japan, where it records 75 percent of its sales, partly from a stronger yen. Total revenue in Japan grew 16.8 percent to $4.4 billion on a dollar basis, thanks in part to a nearly 13-percent stronger exchange rate. In yen, revenue grew 3.7 percent.
In an earnings release, Aflac Chairman and CEO Dan Amos said he was pleased with the company’s performance.
“Aflac Japan overcame challenges resulting from the most destructive and devastating natural disaster in Japan’s history to achieve strong sales growth,” he said. “We were also encouraged that Aflac U.S. continued to generate positive sales results, despite the lingering weakness in the U.S. economy.”
The company announced a 30-cent per share dividend for the quarter, and Amos estimated operating earnings of $1.54 to $1.60 per share in third quarter.
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