Insurer Aflac's profit rises on strong sales in Japan
(Reuters) - Life insurer Aflac Inc (AFL.N), which counts on Japan for almost 80 percent of its business, reported a better-than-expected quarterly profit, driven by higher premium growth in its Japanese unit.
Aflac, Japan's biggest foreign insurer, however, forecast a third-quarter profit below analysts' estimates. The company, which plans to increase spending in the second half of 2013, said it expects a profit of $1.41 to $1.51 per share.
Analysts on average were expecting earnings of $1.53 per share, according to Thomson Reuters I/B/E/S.
"In Japan, we will increase expenditures on advertising and promotion for our new product launch in August. In the United States, we anticipate increased costs associated with initiatives related to healthcare reform," Chief Executive Daniel Amos said.
The company's premium income rose 8.6 percent in yen terms but fell 11.8 percent to $3.7 billion in dollar terms.
"Aflac Japan's financial results were strong for the quarter, although they were masked by a substantially weaker yen," Amos said in a statement.
The yen has depreciated by nearly 14 percent against the dollar in the first half since the implementation of Prime Minister Shinzo Abe's "Abenomics", which combines aggressive monetary easing and fiscal stimulus with structural reforms.
Aflac's net income rose 84 percent to $889 million, or $1.90 per share, in the quarter ended June 30, from a year earlier.
Operating profit -- a key measure of profitability for insurance companies as it excludes certain investment losses and gains -- was $1.62 per share.
Total revenue rose 2.4 percent to $6.04 billion.
Analysts on average had expected earnings of $1.51 per share on revenue of $5.83 billion, according to Thomson Reuters I/B/E/S.
Aflac shares, which have gained about 13 percent since the company last reported its quarterly results, were down 0.8 percent in extended trading after closing at $60.85 on the New York Stock Exchange on Tuesday.
(Reporting by Neha Dimri in Bangalore; Editing by Maju Samuel)