Aetna Posts Upbeat Q2 Earnings, Lifts FY Forecast

Aetna Inc AET reported stronger-than-expected earnings for the second quarter and lifted its full-year earnings forecast. The Hartford, Connecticut-based company posted quarterly net income of $731.8 million, or $2.08 per share, compared to $548.8 million, or $1.52 per share, in the year-ago period. Excluding non-recurring items, the company's earnings came in at $2.05 per share. Its total revenue climbed to $15.24 billion from $14.51 billion, while operating revenue rose to $15.13 billion from $14.49 billion for the second quarter of 2014.. However, analysts were expecting earnings of $1.82 per share on revenue of $14.53 billion. The average estimate among 17 Estimize users was for earnings of $1.86 per share and revenue of $15.46 billion. Operating revenue for Health Care segment rose to $14.4 billion from $13.8 billion, while Group Insurance segment's operating revenue rose to $628.9 million from $626.4 million. Operating revenue for Large Case Pensions slipped to $90.3 million for the second quarter, versus $93.2 million for the year-ago quarter. Medicaid membership rose 4 percent to 2.14 million, while Medicare Advantage membership climbed 11 percent to 1.23 million. Pretax operating margin widened to 8.7 percent for the second quarter, from 7.6 percent, in the year-ago quarter. During the quarter, the company repurchased 0.9 million shares at a cost of $100 million. "Our performance continues to demonstrate the execution of Aetna's growth strategy and the power of our diversified business portfolio. We believe our proposed acquisition of Humana will further that strategy, delivering both significant value to customers and attractive returns for shareholders," said Mark T. Bertolini, Aetna chairman and CEO. Aetna now projects full-year adjusted earnings of at least $7.40 per share, versus earlier outlook of $7.20 to $7.40 per share. Aetna shares rose 0.73 percent to close at $113.79 yesterday.