Aflac (AFL) reported net income of $303 million in the third quarter of 2026, down 81.5% from $1.6 billion in the same period of 2025. Diluted earnings per share (EPS) were $0.61, versus $3.08 a year earlier. The decline was mainly due to realized losses tied to the strategic repositioning of the investment portfolio during the quarter.
Adjusted earnings (non-GAAP, excluding items the company considers outside management's control) were $1.2 billion ($1,214 million), down 8.5% from $1.3 billion. Adjusted EPS fell 2.4% to $2.43. Adjusted earnings included gains of $453 million from reserve remeasurement. Total revenue came to $3.3 billion, versus $4.7 billion in 3Q25, a 31.0% decline.
The quarter's net income included net investment losses of $1.1 billion, or $2.15 per share, versus gains of $275 million a year earlier. It also included a $51 million provision ($0.10 per share) on deferred tax assets. Annualized return on equity was 4.1%, and adjusted return, excluding foreign currency remeasurement, was 23.7%.
By segment, Aflac Japan's adjusted pre-tax earnings fell 21.0% to $961 million. Aflac U.S.'s rose 31.5% to $493 million. At Aflac Japan, the company ceded about ¥500 billion in cancer insurance reserves to Aflac Re Bermuda, which is expected to free up about $1 billion in capital over time. CFO Max Brodén said the projected margin for Aflac Japan for 2026 rose to 35% to 38%. For Aflac U.S., the expected margin will be above 17% to 20%.
Aflac returned $1.1 billion to shareholders in the quarter: $804 million in share repurchases and $305 million in dividends. The board declared a quarterly dividend of $0.61 per share, payable on December 1, 2026, to shareholders of record on November 18, 2026. It is the 44th consecutive year of dividend increases.
