Aetna profit falls on legal settlement, new CFO named
Aetna Inc said on Thursday that fourth-quarter earnings had fallen sharply as costs rose in parts of its employer-based insurance business and it took charges for settling litigation involving its payment practices for out-of-network care.
The health insurer also said Chief Financial Officer Joseph Zubretsky would lead a new business internally. Shawn Guertin, who has been with Aetna since 2011 and was previously CFO of Coventry Health Care, which the company is buying, will replace Zubretsky on Feb. 25.
Aetna announced plans in August for the $5.6 billion acquisition of Coventry Health Care Inc, part of a strategy to expand in government-sponsored healthcare programs like Medicare.
Aetna said net income had declined to $190.1 million, or 56 cents per share, from $372.6 million, or $1.02 per share, a year earlier.
The latest results include a $78 million after-tax charge for the $120 million settlement the company made in December for the class-action lawsuit. Patients and doctors had accused Aetna of systematically underpaying claims.
Excluding special items, the company reported earnings of 94 cents per share. Analysts on average were expecting 95 cents on that basis, according to Thomson Reuters I/B/E/S.
Aetna affirmed its outlook for a 2013 profit of at least $5.40 a share.