July 31, 2012
(Adds details, more analyst comment)
July 31 - Aetna Inc, the third-largest U.S. health insurer, posted a 15 percent drop in quarterly earnings on Tuesday as expenses rose, but the results were still higher than analysts had expected.
Its membership rose in the latest quarter and Aetna forecast continued growth for the year. It also raised its full-year earnings forecast to a range of $5.00 to $5.10 per share, excluding items, from $5.00.
Shares of Aetna, down some 25 percent since it reported a disappointing first quarter, may not get relief Tuesday after Humana Inc late on Monday unexpectedly cut its outlook. Humana's shares could drag the whole group lower, said Jefferies analyst David Windley.
Susquehanna Financial Group analyst Chris Rigg attributed the stronger-than-expected results mostly to higher underwriting margins, especially in the Medicare segment. Medicare is the U.S. government health insurance program for the elderly.
The company also was active in stock repurchases, so the share count was lower, he noted.
Second-quarter net earnings were $457.6 million, or $1.32 per share, compared with $536.7 million, or $1.39 per share, a year earlier.
Excluding items, earnings were $1.31 per share. On that basis, analysts on average were expecting $1.25, according to Thomson Reuters I/B/E/S.
Quarterly revenue rose to $8.83 billion from $8.32 billion, helped by higher premiums from the company's Medicare and commercial healthcare businesses.
Aetna shares closed at $36.67 on Monday on the New York Stock Exchange.
(Reporting by Debra Sherman in Chicago and Esha Dey in Bangalore; Editing by Lisa Von Ahn and Maureen Bavdek)
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