Aetna Narrows 2Q Profit But Beats as Membership Grows, Ups FY Forecast

By Jennifer Booton Features FOXBusiness

Health insurer Aetna (AET) reported a 15% decline in second-quarter earnings but topped Wall Street expectations and lifted its fiscal 2012 earnings guidance.

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Led by membership growth in its Medicare business and higher premium rates, revenues climbed to $8.18 billion in Aetna’s latest period from $7.69 billion a year ago.

Total medical membership as of June 30 increased to 18 million from 17.9 million a year ago. However, membership in its commercial dental group declined during the period and sales were below average analyst estimates of $8.81 billion in a Thomson Reuters poll.

The Hartford, Ct.-based health benefits company reported net income of $457.6 million, or $1.32 a share, compared with a year-earlier $536.7 million, or $1.39. Excluding one-time items, Aetna earned $1.31, topping average analyst estimates of $1.25 in a Thomson Reuters poll.

“Aetna's solid second-quarter financial results build upon our strong performance in the first quarter," the company’s chief executive, Mark Bertolini, said in a statement.

The performance, he said, is based on “sustained execution on the fundamentals of our business,” including membership and revenue growth and tighter costs.

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The No. 3 biggest U.S. health insurer continues to project membership growth for 2012 and lifted its fiscal forecast to a range of $5.00 to $5.10 a share, bracketing average analyst estimates of $5.04 a share.