Aflac's Dollar Headwind: Currency Fluctuations Weigh on Q2 Results

Aflac's second-quarter results showed a decline in adjusted profit due to exchange rate fluctuations. The company reported $1.75 per share in adjusted profit, falling short of the consensus estimate of $1.77 from LSEG. Revenue came in at $4.1 billion, also lower than the expected $4.16 billion.

The main culprit behind this decline was the weaker Japanese yen against the US dollar. Aflac earns premiums and profits in yen, which are then converted to dollars for reporting purposes. This mechanical conversion results in a 5-cent decrease in reported earnings per share due to the exchange rate.

Despite this, Aflac's US business performed relatively well, with net premiums increasing by 2.3% to $1.5 billion and sales rising 2.6% to $349 million. However, Japan's premium earnings fell 12.7% to $1.5 billion.