Protecting people from financial catastrophe is just part of Aflac's (NYSE:AFL) business, as the insurer designs the products with which U.S. customers are most familiar to provide much-needed cash during times of hardship. Aflac doesn't just cover millions of Americans -- it also has a highly successful Japanese business that gives the company geographical diversification.

Coming into Wednesday's third-quarter financial report, Aflac investors were expecting that the insurance company would post solid earnings growth despite potential top-line contraction, but the company went above and beyond most of those expectations. Even as the market runs into some new obstacles, Aflac has high hopes that it can stay on pace to deliver strong results for the rest of 2018 and beyond.

Duck talking on mobile phone.

Image source: Aflac.

Things are just ducky for Aflac

Aflac's third-quarter results continued the run of success that the insurer has had. Revenue rose 1% to $5.58 billion, but that was a lot better than the 1% decrease that most of those following the stock were expecting to see. Profits fared much better, with adjusted net income jumping 17% and producing adjusted earnings of $1.03 per share, easily topping the $0.95 per share consensus forecast among investors.

For a change, Aflac didn't see a lot of impact from the foreign currency markets. The Japanese yen was very slightly weaker against the U.S. dollar than it had been in the year-earlier period, but the difference amounted to just 0.4%. Aflac said that the resulting impact on earnings was too negligible to show up in the per-share figures.

From a segment perspective, Aflac saw mixed performance across the company. In its Japanese operations, premium income was down more than 1%, but an 8% rise in net investment income helped to lift up total revenue for the unit by just a tenth of a percent. Adjusted pre-tax income in Japan was higher by about 1%, but sales of so-called third-sector products such as cancer, medical, and income support insurance saw modest declines.

U.S. results once again fared somewhat better. Premium income domestically climbed 2.4%, and a 3.3% rise in net investment income helped send total revenue higher. Adjusted pre-tax income picked up nearly 6%, with rising profit margin figures helping to lift Aflac's overall performance.

Can Aflac do even better?

CEO Daniel Amos was generally happy with the way that Aflac did. "We are pleased that our third quarter results in both Japan and the United States reflected solid performance overall," Amos said, "and advanced our progress toward achieving the company's objectives for 2018." The CEO also called out the Japanese business in particular, noting that results were better than expected.

Yet Aflac also sees challenges ahead. For the Japanese market, Aflac expects similar results for the fourth quarter as it just saw in the third quarter, with steady premium growth of 2% to 3%. However, rising expenses in the fourth quarter will put pressure on the insurer's U.S. operations, and Aflac now expects premium sales growth to be near the bottom of its previous 3% to 5% target.

Even so, Aflac remains committed to treating its shareholders well. The company still thinks it will buy back between $1.1 billion and $1.4 billion in stock during 2018, using the benefits of tax reform to continue its past practice of repurchases. Yet Aflac also celebrated its 36th straight year of higher dividends, and quarterly payouts will remain an important part of the insurer's capital allocation strategy.

Aflac investors didn't seem all that surprised with the news, and the stock was largely unchanged in after-hours trading following the announcement. As long as customers need the protection that its insurance products provide, Aflac will remain a successful business with prospects for an even happier future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.