Aetna Posts Upbeat Q1 Profit, Lifts FY Earnings Outlook

Aetna Inc AET reported stronger-than-expected earnings for the first quarter and lifted its earnings guidance for the year. For FY15, Aetna now projects earnings of $7.20 to $7.40 per share, versus its earlier outlook of at least $7 per share. The Hartford, Connecticut-based company reported quarterly earnings of $777.5 million, or $2.20 per share, compared to $665.5 million, or $1.82 per share, in the year-earlier period. Its operating earnings came in at $2.39 per share, beating analysts' estimates of $1.95 per share. Its operating revenue climbed 8 percent to $15.1 billion, versus analysts' expectations of $15.5 billion. Operating earnings for its Health Care business rose to $835.6 million for the first quarter, versus $719.0 million in the year-ago quarter. Group Insurance business operating earnings gained to $43.9 million from $41.2 million, while Large Case Pensions business operating earnings fell to $2.1 million from $4.8 million. At the end of the quarter, Aetna's overall medical membership totaled 23.7 million, versus 22.7 million, a year earlier. The company's total medical benefit ratio came in at 79.1 percent from 80.4 percent. Health-care costs increased 6.9 percent to $10.2 billion. Operating expenses came in at $2.8 billion for the first quarter. During the quarter, the company repurchased 2.1 million shares at a cost of $196 million. The average estimate among 14 Estimize users was for earnings of $2.00 per share and revenue of $15.45 billion. "Aetna had a strong start to the year, growing medical membership, operating earnings and operating revenues to record levels in the first quarter of 2015," said Mark T. Bertolini, Aetna chairman and CEO. "This performance speaks to Aetna's focus on operating fundamentals and the continued execution of our growth strategy." Aetna shares fell 1.75 percent to close at $106.92 yesterday.