the world's largest seller of supplemental disability insurance, said on Tuesday earnings rose 1.7 percent in the second quarter, beating expectations, helped by stronger results in Japan.
The company's shares rose 2.6 percent in after-hours trading.
Aflac usually generates about 75 percent of its earnings in Japan, but performance there has been disappointing in recent quarters. In the second quarter, pretax operating income for Japan rose 6.7 percent in dollar terms.
"The biggest issue for Aflac has been weakness in Japan, but results this quarter were better than expected," said Suneet Kamath, who covers life insurance companies at Sanford C. Bernstein & Co.
Sales in Japan have been hit by rising competition and regulatory pressure on disability insurers, Kamath said.
Aflac said net income for the quarter was $415 million, or 84 cents a share, up from $408 million, or 81 cents a share, in the year earlier quarter.
On an operating basis, excluding realized investment gains and losses and changes in the value of some derivatives, Aflac earned $407 million, or 82 cents a share, compared with $376 million, or 75 cents a share in the second quarter of 2006.
Analysts had on average expected operating results of 81 cents a share, according to Reuters Estimates.
Revenue rose 1.8 percent to $3.76 billion.
The company expected operating earnings for the third quarter to be around 80 cents to 82 cents a share and reaffirmed its forecast that it would boost 2008 operating results per share by 13 percent to 15 percent.
Aflac's shares rose to $53.24 in after hours trading, after closing on the New York Stock Exchange at $51.90. The company's shares have risen nearly 13 percent this year through Tuesday's close, while the Standard & Poor's Insurance Industry Group index (.GSPINSC: Quote, Profile, Research) has fallen nearly 2 percent.
The company's shares trade at about 14 times expected 2008 earnings, according to Reuters Estimates. Based on its historical averages and the outlook for its earnings growth, Bernstein's Kamath argues the multiple of consensus earnings should be close to 16 or 17.
(Reporting by Dan Wilchins; additional reporting by Ed Leefeldt)
Thursday, July 26, 2007
Sunday, July 22, 2007
ABN CEO says merger with Barclays is better
Barclays would make a better merger candidate with ABN AMRO than a bid by a group led by Royal Bank of Scotland aimed at breaking up the Dutch bank, a Dutch newspaper quoted ABN's chief executive as saying on Saturday.
But ABN AMRO (AHH.AS: Quote, Profile, Research) CEO Rijkman Groenink told NRC Handelsblad that a majority of the bank's shareholders was likely to back the higher RBS (RBS.L: Quote, Profile, Research) bid.
"I am still convinced a merger with Barclays (BARC.L: Quote, Profile, Research) is the best. It is better in terms of the content but as for the amount, it is not good enough," Groenink said in an interview.
ABN's boards have recommended Barclays' all-share offer currently worth about 35 euros (23.5 pounds) per ABN share.
The RBS consortium, which includes Spain's Santander (SAN.MC: Quote, Profile, Research) and Belgian-Dutch group Fortis (FOR.BR: Quote, Profile, Research), is offering 38.4 euros per share for ABN, of which the cash component would be 93 percent.
The group plans to break up ABN, which has more than 4,500 branches across 53 countries.
Either bid would rank as the world's biggest bank takeover.
ABN said on Wednesday it planned to discuss the consortium's revised offer with both the group's members and Barclays, prompting speculation it may switch its recommendation.
The majority of ABN's shareholders was likely to opt for the consortium's higher offer, Groenink told the newspaper.
"There is a large group of hedge funds and speculators. They have but one interest and that is the highest price, in cash and today preferably. Estimates are that they own 30-40 percent of the bank," he said. Groenink also said institutional investors, specifically those in the United States, would be compelled to go for the highest offer.
In April, he recommended the merger with Barclays as the "best option" for shareholders.
But ABN AMRO (AHH.AS: Quote, Profile, Research) CEO Rijkman Groenink told NRC Handelsblad that a majority of the bank's shareholders was likely to back the higher RBS (RBS.L: Quote, Profile, Research) bid.
"I am still convinced a merger with Barclays (BARC.L: Quote, Profile, Research) is the best. It is better in terms of the content but as for the amount, it is not good enough," Groenink said in an interview.
ABN's boards have recommended Barclays' all-share offer currently worth about 35 euros (23.5 pounds) per ABN share.
The RBS consortium, which includes Spain's Santander (SAN.MC: Quote, Profile, Research) and Belgian-Dutch group Fortis (FOR.BR: Quote, Profile, Research), is offering 38.4 euros per share for ABN, of which the cash component would be 93 percent.
The group plans to break up ABN, which has more than 4,500 branches across 53 countries.
Either bid would rank as the world's biggest bank takeover.
ABN said on Wednesday it planned to discuss the consortium's revised offer with both the group's members and Barclays, prompting speculation it may switch its recommendation.
The majority of ABN's shareholders was likely to opt for the consortium's higher offer, Groenink told the newspaper.
"There is a large group of hedge funds and speculators. They have but one interest and that is the highest price, in cash and today preferably. Estimates are that they own 30-40 percent of the bank," he said. Groenink also said institutional investors, specifically those in the United States, would be compelled to go for the highest offer.
In April, he recommended the merger with Barclays as the "best option" for shareholders.
Tuesday, July 10, 2007
U.S. SEC mulls 5 pct ownership for proxy access
U.S. market regulators are considering allowing shareholders who own at least 5 percent of a company's stock to nominate directors in proxy statements, one source familiar with an internal agency document said on Tuesday.
The U.S. Securities and Exchange Commission is under the gun to propose new proxy access rules in time for 2008 annual shareholder meetings and agency Chairman Christopher Cox has promised to roll out the first draft by the end of July.
But there are crucial variables around any proxy access proposal. They include how many shares must be owned and for how long before a shareholder can nominate a director.
The proposal that the SEC commissioners are considering is best characterized as a "working memo," according to the source, who spoke on condition of anonymity.
It would require a shareholder to own 5 percent of a company's stock to amend bylaws that would enable the shareholder to file a change to a company's proxy. The memo also outlined a "no-hold" period, meaning that a shareholder who wanted to put forward a proxy proposal could do so immediately after buying the shares, rather than having to hold shares for any specific length of time.
An SEC spokesman declined to comment.
Proxy statements have historically been tightly controlled by corporate managers. They are mailed annually to shareholders, telling them about nominations for director seats, executive pay levels and resolutions subject to shareholder votes.
"Not only is 5 percent unworkable, it would be a field day for hedge funds or anyone to come in," said Rich Ferlauto, a director with the American Federation of State, County and Municipal Employees. "It would be taking a good principle to give shareholders long term access and turning it on its head."
Institutional investors would oppose a 5 percent ownership threshold, Ferlauto said, and called it an "irresponsible" move that would pander to hedge funds. A court decision last year forced the SEC to reconsider its rules. The agency for years routinely allowed companies to exclude certain shareholder proposals from proxy statement ballots, but a federal judge ruled that shareholders should be able to consider proposals to help them put their own candidates on corporate boards.
The SEC has been largely silent since the court ruling, which allowed shareholders this year to put forth proxy access proposals at two companies, Hewlett-Packard Co (HPQ.N: Quote, Profile, Research) and UnitedHealth Group Inc. (UNH.N: Quote, Profile, Research).
Both proposals failed to win a majority but garnered applause from AFSCME, which had successfully filed a lawsuit over the SEC's decision to deny the labor group access to U.S. insurer AIG's proxy.
Corporate groups oppose giving so-called special interest groups such as labor unions more access to annual proxy statements.
"It's clear that there isn't an easy compromise. I don't see anything we could support that organized labor could also support," said David Hirschmann, senior vice president of the U.S. Chamber of Commerce
The U.S. Securities and Exchange Commission is under the gun to propose new proxy access rules in time for 2008 annual shareholder meetings and agency Chairman Christopher Cox has promised to roll out the first draft by the end of July.
But there are crucial variables around any proxy access proposal. They include how many shares must be owned and for how long before a shareholder can nominate a director.
The proposal that the SEC commissioners are considering is best characterized as a "working memo," according to the source, who spoke on condition of anonymity.
It would require a shareholder to own 5 percent of a company's stock to amend bylaws that would enable the shareholder to file a change to a company's proxy. The memo also outlined a "no-hold" period, meaning that a shareholder who wanted to put forward a proxy proposal could do so immediately after buying the shares, rather than having to hold shares for any specific length of time.
An SEC spokesman declined to comment.
Proxy statements have historically been tightly controlled by corporate managers. They are mailed annually to shareholders, telling them about nominations for director seats, executive pay levels and resolutions subject to shareholder votes.
"Not only is 5 percent unworkable, it would be a field day for hedge funds or anyone to come in," said Rich Ferlauto, a director with the American Federation of State, County and Municipal Employees. "It would be taking a good principle to give shareholders long term access and turning it on its head."
Institutional investors would oppose a 5 percent ownership threshold, Ferlauto said, and called it an "irresponsible" move that would pander to hedge funds. A court decision last year forced the SEC to reconsider its rules. The agency for years routinely allowed companies to exclude certain shareholder proposals from proxy statement ballots, but a federal judge ruled that shareholders should be able to consider proposals to help them put their own candidates on corporate boards.
The SEC has been largely silent since the court ruling, which allowed shareholders this year to put forth proxy access proposals at two companies, Hewlett-Packard Co (HPQ.N: Quote, Profile, Research) and UnitedHealth Group Inc. (UNH.N: Quote, Profile, Research).
Both proposals failed to win a majority but garnered applause from AFSCME, which had successfully filed a lawsuit over the SEC's decision to deny the labor group access to U.S. insurer AIG's proxy.
Corporate groups oppose giving so-called special interest groups such as labor unions more access to annual proxy statements.
"It's clear that there isn't an easy compromise. I don't see anything we could support that organized labor could also support," said David Hirschmann, senior vice president of the U.S. Chamber of Commerce
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