Thursday, September 18th19.1°C
19716

Aetna 2Q profit increases 2.4 per cent, tops forecast

Aetna's second-quarter profit climbed more than 2 per cent, as gains from an acquisition helped the health insurer top expectations and raise its 2014 earnings forecast again.

But the Hartford, Connecticut, company's shares slipped Tuesday after it also reported a higher medical cost measurement than analysts expected and a slight performance dip for its health care segment, the biggest part of its business.

The insurer said a better performance from its group life and disability business helped grow earnings in the quarter, as did an additional month of results from Medicare and Medicaid coverage provider Coventry Health Care, which Aetna bought last year for $6.9 billion.

But the health care segment's operating earnings, which exclude investment gains and losses, slipped about 1 per cent to $584.3 million. Aetna's medical-loss ratio for its commercial health coverage, which basically measures the percentage of premiums spent on medical care and some other costs, climbed to 80.6 per cent from 79.1 per cent.

"The headline numbers looked fine, but a deeper look into second quarter results is less flattering," Citi analyst Carl McDonald said in a research note.

Overall, earnings for the nation's third-largest health insurer climbed to $548.8 million, or $1.52 per share, from $536 million, or $1.49 per share, in last year's quarter.

Adjusted earnings came to $1.69 per share. That topped average analyst expectations of $1.61 per share, according to Zacks Investment Research.

Aetna's operating revenue, which also excludes investment gains and losses, climbed 25 per cent to $14.5 billion revenue That also beat average Wall Street expectations for $13.97 billion.

The insurer's enrolment climbed about 5 per cent, compared with last year's second quarter, to top 23 million people. A small part of that gain came from the health care overhaul, the massive law that aims to cover millions of uninsured people.

Aetna Inc. has added about 600,000 people so far this year through the overhaul's public insurance exchanges, which began accepting enrolment last fall and help people find coverage often with help from income-based tax credits.

Aetna participated in 17 individual insurance exchanges, making it one of the largest players in that new market. The company said Tuesday it will only expand into one more, an exchange in Georgia, for coverage that starts in 2015. Competitor UnitedHealth started off much more slowly, participating in only four exchanges this year, but it plans to add as many as 20 for 2015.

Aetna Chief Financial Officer Shawn Guertin said his company plans more measured growth in part because it's still learning about the newly insured population, most of whom only started coverage in April and May.

"We wanted to get substantial experience to learn and to figure out how to serve this population as best we could," he said.

Aetna now expects full-year adjusted earnings to range between $6.45 and $6.60 per share, up from its April forecast of $6.35 to $6.55 per share.

Analysts expect, on average, earnings of $6.50 per share, according to FactSet.

Aetna shares fell nearly 4 per cent, or $3.32, to $81.50 in midday trading, while broader indexes were nearly flat. The company's stock had already advanced 24 per cent since the start of the year, as of Monday's close, and set several new all-time high prices.

The Canadian Press


Read more Business News

23021


Recent Trending




Today's Market
S&P TSX15465.54+6.66
S&P CDNX965.79-6.72
DJIA17265.99109.14
Nasdaq4593.426+31.237
S&P 5002011.36+9.79
CDN Dollar0.9121-0.0022
Gold1220.60-6.30
Oil93.08+0.01
Lumber349.00+1.00
Natural Gas3.959-0.016

 
Okanagan Companies
Pacific Safety0.16-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.32+0.07
Cantex0.060.00
Anavex Life Sciences0.2261-0.01
Metalex Ventures0.060.00
Russel Metals37.01+0.64
Copper Mountain Mining2.68-0.05
Colorado Resources0.175+0.005
ReliaBrand Inc0.024-0.003
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.30+0.01

 



21097

FEATURED Property
20793162099 Horizon Drive
4 bedrooms 3 baths
$529,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...


Power-save your way to a down payment

Part 1 of 2 Photo: Thinkstock.com1. Move in with your parents or in-laws Explain that you're thinking strategically in moving back home. The quickest way to get into the housing market is to ma...


Price Guarantees

Article written by Linda Bustos Though I’d never recommend “lowest prices” as a unique selling proposition, I notice many retailers use a Price Match Guarantee or even a 110% Guara...

_





23109


Member of BC Press Council


22755