Aflac Becomes Another Victim of CIT

COLUMBUS, Ga. (TheStreet) -- Chalk up Aflac(AFL Quote) as yet another victim of CIT's(CIT Quote) financial woes.

The insurer saw second-quarter profit tumble 35%, hurt by investment losses mostly related to CIT.

During the quarter, the company earned $314 million, or 67 cents a share, compared with $483 million, ot $1.02, in the year-ago period.

Revenue slipped 0.5% to $4.31 billion from $4.34 billion last year.

Shares of the company closed down 3% to $35.45, and continued to fall in after-market trading.

Separately, Aflac also announced that it will purchase Continental American Insurance for $100 million.

Aflac received more bad news on Wednesday, when it was downgraded by Citi Investment Research analyst Colin Devine to hold, high risk, from buy, high risk. Devine said Aflac's share price had risen to reflect its market value, as well as reaching his $36 price target for the stock.

He also believes the insurer's earnings growth will slow over the next three years, "to roughly half its historic 15% pace."

Devine also lowered his full-year 2009, 2010 and 2011 earnings forecasts. He now expects earnings per share of $4.65, $5.05 and $5.50, respectively, for those years.

Rival Unum(UNM Quote) will release its second-quarter results on Aug. 4.

-- Written by Jeanine Poggi in New York.