For 20th consecutive year, Columbus-based insurance company Aflac Inc. made its earnings objective.
The winning streak has run the entire time that Chairman and Chief Executive Officer Dan Amos has been in charge.
“We generated significant growth during that 20-year period, reflecting the strength of our insurance operations,” Amos said in a prepared statement Tuesday as the company released its fourth-quarter and year-end 2009 earnings.
The release showed the predicted revenue growth, solid sales performance in Japan and a sales decline in U.S. sales.
Aflac’s fourth-quarter results showed:
-- Operating earnings of $558 million, compared with $458 million in the fourth quarter of 2008. Operating earnings per diluted share rose 20.4 percent to $1.18, compared with 98 cents a year ago.
-- Net earnings were $251 million, or $.53 per diluted share, compared with $197 million, or $.42 per share, a year ago.
-- Net earnings in the fourth quarter included after-tax realized investment losses of $307 million, or $.65 per diluted share, compared with losses of $262 million, or $.56 per diluted share in the fourth quarter of 2008.
-- Realized investment losses in the fourth quarter also included charges of $110 million for the impairment of the company’s holdings of Takefuji Corp., a Japanese consumer finance company, and $7 million for the impairment of other securities.
-- Total revenues benefited from the strengthening of the yen to the dollar in the fourth quarter and rose 7.9 percent to $4.6 billion, compared with $4.3 billion in the fourth quarter of 2008.
For the year, the earnings showed:
-- Total revenues rose 10.3 percent to $18.3 billion, compared with $16.6 billion a year ago.
-- Net earnings were $1.5 billion, or $3.19 per diluted share, compared with $1.3 billion, or $2.62 per share, in 2008.
-- Operating earnings for the full year of 2009 were $2.3 billion, or $4.85 per diluted share, compared with $1.9 billion, or $3.99 per share, in 2008.
The really good news came out of Japan, where Aflac does 75 percent of its business. Total revenues were up 3.4 percent.
“The month of December was the largest December we have had in the 35-year history of Aflac Japan,” said Ken Janke Jr., senior vice president for investor relations. “They executed very well.”
Part of the success was fueled by new products.
“Aflac Japan in particular had a great 2009,” Amos said. “We successfully launched new products last year, which contributed significantly to our strong sales results, exceeding our objective for the year. We also continued to make strides in expanding our distribution system.”
In the U.S., total new annualized premium sales in the fourth quarter were down 6.3 percent to $419 million. For the year, total new sales declined 6.4 percent to $1.5 billion.
The fourth-quarter sales figures were impacted by the loss of the Wal-Mart group account. That loss was offset by the group sales from newly acquired Continental American Insurance Company which is now called Aflac Group Insurance. It made $27 million in the fourth quarter.
Aflac’s stock price came under significant pressure a year ago because of analysts’ concerns about the company’s investment portfolio.
“We maintained a high level of confidence in the quality of our balance sheet in 2009,” Amos said. “We believed then, and continue to believe today, that our investment approach of effectively matching assets to policy liabilities is the most prudent approach for our policyholders and shareholders. More than anything, we have been intensely focused on assessing our capital level.”
Total investments and cash at the end of December 2009 were $73.2 billion, compared with $71.6 billion at September 30, 2009, the company released. The increase in total investments and cash primarily resulted from improvement in the fair values of the company’s investments since the end of the third quarter of 2009.
“Despite the negative impact of realized investment losses and credit rating downgrades on some investments we hold, Aflac’s capital position from a U.S. regulatory standpoint remained strong in 2009,” Amos said.
Amos is not ready to predict a full sales recovery this year.
“As we look to sales opportunities in 2010, we believe it makes sense to remain cautious,” he said. “Economies around the globe appear to be recovering, but the timing of full recovery remains uncertain.”
Aflac, because of the economy, has set sales targets of up to 5 percent increases in both the U.S. and Japan. The company’s 2010 goal is operating earnings growth of between 9 and 12 percent, Amos said.
The Aflac board declared a first-quarter cash dividend of 28 cents per share. It is payable on March 1 to shareholders of record at the close of business on Feb. 16.