Aflac (NYSE: AFL) reported Q3 EPS of $1.39, $0.26 better than the analyst estimate of $1.13. Revenue for the quarter came in at $5.7 billion versus the consensus estimate of $5.5 billion.

OUTLOOK

Commenting on the company's results, Chairman and Chief Executive Officer Daniel P. Amos stated: "As a result of the global COVID-19 pandemic, many people have been facing the most challenging times of their lives for various reasons, and our thoughts and prayers are with everyone affected. The safety and health of everyone with whom we do business remains our greatest priority.

"The environment created by COVID-19 continues to impact our sales results both in the United States and Japan. As communicated, we expect this to significantly affect full year sales results in both countries, with the potential for a modest sales improvement for the remainder of the year, contingent upon the pace of economic recovery. Economic conditions and claims activity within this environment remain uncertain in both the Japan and the U.S. as both countries address the pandemic.

"We have taken several actions to navigate the pandemic in Japan and the U.S. Early in the fourth quarter, we offered a voluntary separation plan to eligible employees, which will result in a reduction in our U.S. insurance and corporate workforce of approximately 9%. We expect run-rate annual savings in the range of $45 to $50 million and will record a one-time expense associated with the separation plan of approximately $45 million in the fourth quarter. Other activities include a tactical approach to product development, investment in our distribution platforms, the promotion of wellness benefits with policyholders in the U.S., and accelerated investment in automation and digital roadmaps. You see the impact of these moves beginning to come through our results in the way of elevated investment, recovery in our benefit ratios and movement in persistency. While in total these activities represent short-term headwinds to pretax profit margins, they serve us well as we enter 2021 and an expected recovery in economic conditions.

"As always, we are committed to prudent liquidity and capital management. This includes maintaining strong capital ratios on behalf of our policyholders in both the U.S. and Japan and a tactical approach to capital allocation. It goes without saying that we treasure our record of dividend growth. With the fourth quarter's declaration, 2020 will mark the 38th consecutive year of dividend increases. Our dividend track record is supported by the strength of our capital and cash flows. At the same time, we remain in the market repurchasing shares and focused on integrating the growth investments we have made in our platform. By doing so, we look to emerge from this period in a continued position of strength and leadership."

*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.

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