Health insurer Aetna's 2Q profit rises 17 percent

Friday, July 26, 2013, Vol. 37, No. 30
TOM MURPHY, AP Business Writer

Aetna Inc.'s second-quarter earnings jumped 17 percent, and the health insurer raised its 2013 forecast as it reaped revenue and enrollment gains from its acquisition of fellow insurer Coventry Health Care.

The Hartford, Conn., company said Tuesday that it earned $536 million, or $1.49 per share, in the three months that ended June 30. That's up from $457.6 million, or $1.32 per share, in last year's second quarter.

Adjusted earnings totaled $1.52 per share, excluding capital losses and one-time items such as costs tied to the Coventry deal.

Revenue climbed 31 percent to $11.56 billion, also excluding capital losses.

Analysts forecast earnings of $1.40 per share on about $11.9 billion in revenue, according to FactSet.

Aetna is the nation's third-largest health insurer, trailing UnitedHealth Group Inc. and WellPoint Inc. in enrollment. Health insurance is Aetna's main product, but the company also sells dental, group life and disability coverage.

The insurer closed its $6.9 billion acquisition of Coventry Health Care Inc. in May and had raised its full-year earnings forecast then. The acquisition, announced last year, will help Aetna build its presence in the state- and federally funded Medicaid program that covers poor and disabled people and the federally backed Medicare program for the elderly.

Growth in both those segments helped raise Aetna's medical membership 21 percent to nearly 22 million people in the quarter. The company's commercial enrollment, which includes individual and employer-sponsored health insurance, also jumped 15 percent to 18.6 million.

Aetna also booked $101.3 million in costs tied to the Coventry deal in the quarter.

Aetna now expects 2013 adjusted earnings of between $5.80 and $5.90 per share, up from its previous projection of $5.70 to $5.85 per share.

Analysts had expected, on average, $5.80 per share.