DOW JONES NEWSWIRES
Aetna Inc.'s (AET) fourth-quarter earnings rose 73% as the
health insurer's membership rolls increased and margins
improved.
Aetna has seen increased profits in recent quarters, despite
revenue declines, as patients reduce their use of health services
amid economic turmoil. When patients avoid doctor and hospital
visits, insurers cover fewer bills, which boosts earnings.
Aetna has also become more acquisitive of late as it diversifies
its operations, such as buying Prodigy Health Group, an
administrator of self-funded health-care plans, in June. Providing
self-funded options for mid-sized and small businesses is an area
where health insurers have been seeking growth. And in October,
Aetna bought the account-based health plan administrator PayFlex
Holdings Inc. and a Medicare supplement business with more than
150,000 members from Genworth Financial Inc. (GNW).
Aetna reported a profit of $372.6 million, or $1.02 a share, up
from $215.6 million, or 53 cents, a year earlier. Excluding items
such as realized capital gains, transaction-related costs and
severance, earnings rose to 97 cents from 63 cents. Revenue edged
up 0.4% to $8.54 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 97 cents on revenue of $8.5 billion.
Operating margin rose to 78.6% from 77.9%.
Its total medical benefit ratio, or the amount of premiums used
to pay patient medical costs, fell to 80.7% from 83% a year earlier
and was up from 78.9% in the prior quarter.
Total medical membership rose to 18.5 million from 18.23 million
in the prior quarter.
The company also backed its full-year earnings forecast.
Shares closed Tuesday at $43.70 and were inactive premarket. The
stock has risen 3.6% so far this year.
--By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com