Aetna Posts Q1 Loss; Raises 2017 EPS View

(RTTNews) - Health insurer Aetna (AET) reported that its net loss attributable to the company for the first-quarter of 2017 was $381 million or $1.11 per share for first-quarter 2017 compared to net income of $737 million or $2.08 per share in the first-quarter 2016. The net loss during first-quarter 2017 compared with net income during first-quarter 2016 was primarily due to first-quarter 2017 reflecting costs associated with the termination of the Humana Merger Agreement.

Adjusted earnings were $939 million or $2.71 per share compared to $821 million or $2.32 per share for first-quarter 2016. The double-digit percentage increase in adjusted earnings during first-quarter 2017 was primarily due to strong performance in Aetna's Health Care segment, despite the continued pressure in Aetna's individual Commercial products. Analysts polled by Thomson Reuters expected the company to report earnings of $2.37 per share. Analysts' estimates typically exclude special items.

"Our first quarter performance demonstrates the power of the disciplined execution of Aetna's strategy," said Mark T. Bertolini, Aetna chairman and CEO. "This strong start to the year has enabled Aetna to absorb continued pressure from our individual Commercial products while increasing investment in our growth initiatives and raising our full-year 2017 earnings per share projections."

Total revenue and adjusted revenue were $15.2 billion and $15.5 billion, respectively, for first-quarter 2017 and both $15.7 billion for first-quarter 2016. Analysts expected revenue of $15.44 billion for the quarter. The decrease in total revenue and adjusted revenue was primarily due to lower premiums in Aetna's Health Care segment, including lower membership in Aetna's ACA compliant individual and small group products and the temporary suspension of the HIF in 2017, partially offset by higher premium yields in Aetna's Commercial business and membership growth in Aetna's Government business, each in Aetna's Health Care segment. The decrease in total revenue during first-quarter 2017 also was due to a realized capital loss during first-quarter 2017 of $336 million pre-tax due to unamortized cash flow hedge losses being recognized into earnings upon the redemption of certain of Aetna's senior note.

Looking ahead for fiscal year 2017, the company now expects net income per share to be in the range of $4.48 to $4.68, and adjusted earnings per share $8.80 to $9.00. Analysts expect annual earnings of $8.88 per share It said in January 2017 it expected fiscal 2017 net income per share to be at least $3.70, and operating earnings of at least $8.55 per share.