Aflac (NYSE:AFL) is an insurance giant, but it's not your typical insurance company. Rather than concentrating on traditional health insurance products, Aflac concentrates on supplemental coverage options that are more specifically tailored to particular health needs of its customers. Moreover, the business isn't U.S.-centric, as Aflac does more business in Japan than it does domestically.

Coming into Thursday's fourth-quarter financial report, Aflac investors hoped that the company would be able to sustain its track record of earnings growth, but they were prepared for a bit of pressure on revenue. Sales did indeed drop from year-earlier levels, yet that didn't keep Aflac's bottom-line performance from being strong.

Duck holding a blue mobile phone to its head, holding it with its wing.

Image source: Aflac.

What Aflac's quacking about

The company's fourth-quarter results were mixed in most investors' eyes. Revenue of $5.13 billion was down 5.5% from year-ago levels, which was far worse than the roughly 1% drop that most of those following the stock were expecting. However, adjusted net income climbed 23% to $779 million, and that produced adjusted earnings of $1.02 per share, topping the consensus forecast among investors for $0.94 per share.

Once again, stability in the exchange rate between the U.S. dollar and the Japanese yen led to minimal currency impact across the two main parts of Aflac's business. A difference of just 0.1% in exchange rates between now and the year-earlier period led to no significant effect on revenue or earnings.

Aflac Japan had mixed performance as a segment. In U.S. dollar terms, premium income was down 0.7%, but net investment income jumped nearly 8% to lift total revenue by 0.5%. Adjusted earnings were higher by nearly 7% on a pre-tax basis, as sales of third-sector products in the cancer, medical, and income-support areas were higher by 1%.

Aflac's U.S. unit had more-consistent sales gains but struggled on the earnings front. Premium income was higher by 2.7%, and a slight rise in net investment income led to a total gain of 2.4% on the revenue front. However, pre-tax adjusted earnings were down 5%, as higher expenses sent profit margin levels lower.

What's ahead for Aflac?

CEO Daniel Amos explained why he was particularly pleased with the way Aflac performed despite the mixed results. "Improved profitability is particularly impressive," Amos said, "when considering we have stepped up investment in our core technology platforms and growth initiatives." Amos went on to explain that further investments in growth and innovation will be crucial to Aflac's success in 2019 and beyond.

Check out the latest Aflac earnings call transcript.

Aflac's outlook had good points and bad. In Japan, it expects a slight decline in total earned premiums during 2019 because of the run-off of its limited-pay policies. After such a strong 2018, third-sector sales are likely to fall by low- to mid-single-digit percentages during 2019. In the U.S., though, earned premium growth of 2% to 3% and stable sales growth are likely, as investments made during 2018 start to pay off in greater efficiency. Overall, Aflac expects adjusted earnings of $4.10 to $4.30 per share, and that perfectly surrounds the consensus view among those following the stock for $4.20 per share.

Capital return remains a priority for Aflac as well. The company expects buybacks of $1.3 billion to $1.7 billion during 2019, and it raised its dividend by 4% to $0.27 per share on a quarterly basis.

Aflac investors seemed generally satisfied with the report, and the stock opened higher by 1% after having traded down in the pre-market session following the announcement. With so many opportunities for growth in its unique niche, Aflac is in a great position to continue to achieve the success it's enjoyed within the insurance industry.