After the market closed on Tuesday, Aflac (NYSE:AFL) reported third quarter net earnings of $1.56 per diluted share versus consensus estimates of $1.43. 

Operating earnings per share -- removes nonrecurring items and gives a more accurate glimpse into underlying profitability from insurance operations – was up 2.7% year-over-year. Excluding the impact of yen/dollar exchange rate operating earnings were up 5.4%.

Aflac Japan
"Aflac Japan, our largest earnings contributor, generated strong financial results for the quarter." CEO Daniel Amos. 

In Yen, premium income declined 0.7% in the third quarter on weaker sales. Sales through the company's bank channel slid 42.7% and Aflac's medical and cancer sector – representing their strongest opportunity for growth – fell 12.6%.

While the company anticipated lower sales, they are expecting the introduction of their new exclusive cancer product, "New Cancer DAYS," with Japan Post to help grow sales in the near future. Moreover, Aflac has furthered its relationship with Japan Post by expanding the number of postal outlets selling their cancer product from 3,000 to 10,000 which began on October 1st.

Aflac continues to operate with extremely strong profit margins in Japan. Improving to 19.6% in the third quarter from 19.2% a year ago.

Aflac U.S.
"Aflac U.S. also continued to perform well in the third quarter." 

The company has increased spending in an attempt to reorganize and turnaround its lackluster U.S. operations. While this was expected to create a "short-term disruption" U.S. sales were relatively flat for the quarter. However, despite the better than expect results in the U.S., Amos suggested that there is still work to be done and expects full-year sales to be down 2% to 4%.

Similar to Japan, Aflac U.S. saw a nice boost in net investment income which was up 2.2%. Profit margins declined slightly – to 18.4% from 18.5% a year ago – but remains very strong.

Looking for takeaways
With total revenue down 2.5% compared to a year ago, the earning beat looks like it came from a 3.7% decline in payouts toward benefits and claims and 1.9% decrease in operating expenses. However, from a bigger picture perspective, Aflac remains committed to strengthen relationships – with Japan Post in particular -- and investing in itself to improve for the future.

Lastly, Aflac's strong cash positions continues to allow the company to reward shareholders as they expect to repurchase $1.2 billion of common stock in 2014, and an additional $1.3 billion worth of repurchases in 2015. Also, Aflac increased its dividend 5.4% from $0.37 in the second quarter to $0.39 per share. This marks the company's 32nd consecutive year of increasing its dividend.