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Aflac popular on Wall Street today

Wall Street liked the news from Wynnton Road.

Wednesday, the day after Aflac Inc., released its first-quarter earnings, the insurance company's stock rose 4.5 percent in trading on the New York Stock Exchange.

The stock closed at $51.45, an all-time high when the price is adjusted for splits. It all came on a day when the Dow Jones Industrial Average closed above 13,000 for the first time.

"We are pleased with the way the market reacted," said Aflac Senior Vice President Ken Janke Jr.Aflac released its earnings report Tuesday after the market closed. The company reported 10.9 percent increase in profits, well above what some Wall Street analysts had projected.

Analysts surveyed by Thomson Financial had expected earnings growth of 79 cents per share. Aflac's net earnings rose to $416 million, or 84 cents per share. The analysts also predicted total revenue would hit $3.73 billion. Revenue came in at $3.8 billion, compared to $3.6 billion in last year's first quarter.

The company's stock closed at $49.22 a share on Tuesday. When the markets opened Wednesday morning, Aflac stock started at $50.55 and rose quickly to an intra-day high of $54 per share.

Columbus stockbroker John Shinkle, senior vice president and manager for Stifel Nicolaus & Co., did not see Aflac's surge coming. When he looked at Tuesday's earnings report, he was struck by a nearly 11 percent first-quarter drop in new policy sales in Japan, where about 70 percent of the company's business is done.

"I was prepared to talk to my clients about why the stock was down and it shot up immediately," Shinkle said. "When it took off, it was a real surprise."

Janke said the company had communicated the likelihood of poor Japanese sales numbers to the analysts.

"Sometimes down 10.6 percent isn't a bad thing if you thought it was going to be down 15," Janke said. "We had pretty much conditioned the market it was going to be a challenging year for new sales in Japan. It was down 16.6 percent in the fourth quarter of last year. It may just be when people saw it down 10.6 percent, they breathed a collective sigh of relief that it wasn't down significantly more than that."

Aflac Chairman and CEO Dan Amos and the company's top executives were on a conference call with analysts as the stock price was climbing.

"We knew it was moving up as we spoke," Janke said.

During that conference call, Amos said the company would roll out a new product in September. That product will be in Japan, but the company is not ready to disclose what it will be, Janke said."It will be consistent with what we already offer," Jake said.

Aflac sells cancer insurance, standalone medical insurance and a series of life insurance products in Japan.

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