Aetna Inc. (AET) boosted its stock buyback program by $1 billion Friday as the company continues to post earnings increases, helped by the acquisition of Coventry Health Care Inc.
The company's previous share buyback authorization has $388 million remaining, Aetna said. The company's market value is about $25.89 billion, according to FactSet.
Health insurers have been broadly rewarded lately by signs Americans are continuing to use health services lightly, which means fewer bills to cover. Aetna, the third-largest managed care company by membership, has said it expects to grow its operating earnings in 2014, when health insurers are expecting to digest big changes under the complex health-care overhaul law. The law creates opportunities to add millions of new customers by expanding coverage, but it also adds new costs and rules governing how insurers operate.
In February, Aetna reported its fourth-quarter profit increased on higher revenue and membership after its acquisition of Coventry.
Yet the insurer warned that it expects to lose money on its business in the health-law marketplaces this year, with the demographics of enrollees skewing slightly more than expected toward people likely to rack up higher costs.
Shares are up 2.7% to $73.42 in recent trading and were up 56% in the past 12 months.