Sign in to comment!



Aetna 3Q EPS Falls Short, But Sales Jump on Coventry

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.

Follow Jennifer Booton on Twitter at @Jbooton