Aetna Q2 Profit Rises, Lifts Full-year Outlook

(RTTNews) - Diversified healthcare benefits company Aetna, Inc. (AET) Tuesday reported higher second-quarter profit on 25 percent growth in revenues. Results also benefited from acquisition of Coventry Health Care. Medical membership increased from last year, and the health insurer lifted its outlook for the full year.

For the quarter, net income attributable to the company increased to $548.8 million or $1.52 per share from $536 million or $1.49 per share in the previous year. The latest results include $0.17 per share of net charges.

Operating earnings were $1.69 per share, while the firm posted $1.62 per share in the same quarter last year. According to the company, the increase in operating earnings was due to inclusion of about one additional month of Coventry financial results in 2014 as well as higher underwriting margins in its Group Insurance segment.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.60 per share for the quarter. Analysts' estimates typically exclude special items.

Operating revenues for the quarter climbed 25 percent to $14.5 billion from $11.6 billion a year ago. Analysts estimated revenues of $13.99 billion for the quarter. Total revenue was $14.51 billion and $11.54 billion for the second quarters of 2014 and 2013, respectively.

The company said its revenues benefited from higher Health Care premiums from about one additional month of revenue in 2014 from the Coventry acquisition, membership growth in its Health Care businesses and the effects of pricing actions designed to recover Health Care Reform mandated fees and taxes.

Health care premiums increased to $12.42 billion from $9.70 billion a year earlier. Health Care business operating revenues were $13.8 billion, an increase of 27 percent over the prior year.

Mark Bertolini, chairman, CEO and president of the company said, "Our year-to-date results give us increased confidence in our ability to achieve our targeted high single-digit pretax operating margin again in 2014."

As at June 30, 2014, medical membership totaled 23.10 million members , a sequential increase of 385,000 members. Medical membership increased from 21.97 million members in the year-ago quarter.

For full year 2014, the firm now expects operating earnings per share to be in the range of $6.45 to $6.60 per share, from the previous projection of $6.35 to $6.55 per share.

Aetna also increased both year-end medical membership projection to about 23.4 million members from the previous projection of more than 23 million and full-year 2014 operating revenue projection to at least $57 billion from its previous range of $56 billion to $57 billion.

Analysts currently project earnings of $6.54 per share for 2014, on revenues of 56.70 billion.

AET closed Monday's trading at $84.82, up 1.71 percent.