Aflac posts higher second-quarter earnings

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)