Aetna Lifts Full-year View Yet Again As Q2 Profit Tops Estimates

(RTTNews) - Healthcare benefits company Aetna Inc. (AET) Tuesday lifted its operating earnings guidance for full year yet again, as the firm reported a higher profit for its second quarter, with strong performance in its commercial insured and Medicaid businesses. Operating earnings, excluding items, topped analysts' expectations mainly due to acquisition of Coventry in May 2013.

For the second quarter, the company posted net income of $536 million or $1.49 per share, higher than $457.6 million or $1.32 per share in the prior year.

Aetna said its recent-quarter earnings included a $0.16 per share gain on reduction of reserve for anticipated future losses on discontinued products and a $0.09 per share benefit on settlement of a reinsurance recoverable.

Meanwhile, the positive impact of these items was offset by $0.23 per share of transaction and integration-related costs and $0.05 per share of net realized capital losses.

Excluding items, operating earnings for the recent quarter were $1.52 per share, while it was $1.31 per share in 2012.

On average, 21 analysts polled by Thomson Reuters expected earnings per share of $1.41 for the quarter. Analysts' estimates typically exclude one-time items.

Operating revenues climbed 31 percent to $11.56 billion from $8.83 billion a year earlier. Total revenues for the quarter grew to $11.54 billion from $8.84 billion a year ago. Analysts estimated revenues of $11.99 billion for the quarter.

The company attributed the rise in revenues to higher Health Care premiums in each of its Commercial, Medicare and Medicaid businesses from the acquisition of Coventry as well as growth in underlying Medicare membership.

The Health Care business, which provides insured and self-insured medical, pharmacy, dental and behavioral health products and services, reported operating revenues of $10.87 billion, up 33 percent from the prior year, mainly due to Coventry revenue as well as higher premiums in its underlying Medicare business.

Health care premiums increased to $9.70 billion from $7.17 billion in the preceding year.

Group Insurance, which includes group life, disability and long-term care products, reported operating revenues $582.4 million, an increase of 11 percent increase over last year.

Aetna, in early May, completed the acquisition of Coventry Health Care, Inc., a diversified managed health care company. Aetna agreed in August 2012 to acquire Coventry Health Care for $7.3 billion, including assumption of debt.

Mark Bertolini, chairman, CEO and president said, "The second quarter marked a significant milestone for Aetna with the completion of our Coventry Health Care acquisition."

Total benefits and expenses advanced to $10.69 billion from $8.14 billion a year earlier.

Total Medical membership as at June 30, 2013 totaled 21.97 million members, compared to 18.03 million as at June 30, 2012.

For full-year 2013, Aetna now expects operating earnings per share to be in the range of $5.80 to $5.90, up from the prior forecast of $5.70 to $5.85 per share.

Analysts are looking for earnings of $5.82 per share for the year.

AET closed Monday's regular trading at $63.40 on the NYSE.