Aflac Incorporated (AFL) reported first-quarter 2026 adjusted earnings per share of $1.75, missing analyst estimates by 2.9%, though its bottom line still grew 5.4% year over year. Adjusted revenues fell 1.9% year over year to $4.2 billion, trailing the consensus mark due primarily to lower net investment income and adverse exchange rate impacts in Japan; however, this downside was partially offset by stronger sales growth within the U.S. unit. Net benefits and claims declined 5.8% year over year to $1.8 billion, while acquisition and operating expenses decreased slightly by 1.5% to $1.3 billion, driving pre-tax earnings up significantly to $1.2 billion from just $145 million in the prior-year quarter. Geographically, Aflac Japan’s adjusted revenues dropped 4.4% year over year to $2.2 billion, missing consensus expectations, driven by a 6.4% decline in net earned premiums. Despite these underwriting challenges, the segment saw investment income rise 0.9% and new annualized premium sales surge 25.5% year over year, bolstered by strong performance of specific product lines like Anshin Palette and Miraito. Conversely, Aflac U.S. delivered solid growth with adjusted revenues increasing 3.4% to $1.8 billion and net earned premiums advancing 3.5% to $1.6 billion, both metrics beating analyst consensus estimates. Balance sheet and capital allocation figures show Aflac exiting the quarter with total investments and cash of $103.2 billion, down slightly from year-end levels, while adjusted debt dropped 1.2% to $7.6 billion. This deleveraging improved the adjusted debt-to-adjusted capitalization ratio to 21.2%, reflecting a 20 basis point improvement from the previous year-end figure. Shareholders' equity grew 1.6% to $30 billion, leading to an adjusted book value per share increase of 5.7% to $54.96 and a year-over-year ROE improvement to 16.4% (excluding foreign currency impacts). Additionally, the company executed a $1 billion share buyback program in Q1 and paid dividends totaling $315 million during the quarter. Looking ahead, management maintains its forward guidance for benefit ratios ranging from 60-63% in Japan and 48-52% in the U.S. for the current year. Expense ratios are reiterated at 20-23% for Japan and 36-39% for the U.S., while underlying earned premiums are expected to decline slightly by 1-2% globally. Net earned premiums for the U.S. unit are projected to grow, albeit at the lower end of the 3-6% range. Aflac currently holds a Zacks Rank #3 (Hold) based on these mixed but stabilizing quarterly results and future outlooks.