Aetna (AET) revealed a sharp 50% rise in third-quarter sales on Tuesday as it took in a wave of new Medicare subscribers, however high health-care reform costs weighed on earnings per share.
The Hartford, Ct.-based health insurer reported net income of $518.6 million, or $1.38 a share, up slightly from a year-earlier profit of $499.2 million, or $1.47.
Excluding one-time integration and other costs, Aetna said it earned $1.50, missing average analyst estimates in a Thomson Reuters poll by three pennies as government funding cuts related to health reform impacted results.
Despite increased quarterly sales, Aetna still expects to report fiscal 2013 adjusted earnings between $5.80 and $5.90, mostly below the consensus view of $5.89.
Shares of the health benefits giant were off about 1.5% to $60.89 in recent trade.
In its most recent quarter, revenue for the three-month period was $13 billion, up 46% from $8.9 billion a year ago, just ahead of the Street’s view of $12.96 billion.
The gains were driven by the addition of Coventry, the $5.7 billion acquisition Aetna completed in May of this year that led to a sharp rise in Medicare subscribers.
"Aetna reported solid progress and execution this quarter," Aetna CFO Shawn Guertin said in a statement. "Coventry’s businesses performed well, giving us increased confidence in our ability to achieve our synergy and accretion targets."
From the second quarter, 2013 medical membership increased by 184,000.