Aetna Once Again Boosts Earnings Outlook On Strong 4Q

Health-insurer Aetna Inc. (AET) raised its current-year operating earnings forecast based on results in the fourth quarter while also ratcheting up an earlier 2012 projection analysts viewed as leaving room for improvement.

Like its managed-care peers, Hartford-based Aetna has benefited all year from a trend of patients using health services lightly due to economic turmoil. When patients avoid doctor and hospital visits, insurers cover fewer bills, which benefits earnings.

"Based on strong fourth-quarter 2011 performance to date, including actual results for October and November," Aetna now projects operating earnings of $5.15 per share for this year, the company said in a regulatory filing Wednesday. That represents a 15-cent increase over prior guidance.

Meanwhile, Aetna also said it projects operating earnings of about $5.00 a share for next year, which compares with an initial forecast in October of "at least" $4.80 a share. The company noted its projections assume it will repurchase millions more shares.

Though Aetna has pointed toward lower earnings next year, analysts have noted that 2011 guidance was raised multiple times. Aetna updated its outlook ahead of an investor conference it is holding Thursday.

Executives at the event will discuss projections for medical membership of about 18.4 million members at the end of this year, Aetna said in the filing. The company also noted its medical membership is projected to decline early next year, closing the first quarter at about 17.9 million members.

Aetna has said it expects in the first quarter to lose about 500,000 members on administrative service contracts in its commercial business for big corporate customers, with 60% coming from just two accounts, as economic conditions cause some customers to opt for plans with set costs.

The company Wednesday said it expects to grow medical membership over the final three quarters of 2012, driven by growth in its commercial insured and Medicare businesses.

Aetna shares recently traded up 0.8% to $39.60 after hours after slipping about the same amount during regular trading hours Wednesday. Shares have risen nearly 29% this year.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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