Aetna Inc. (AET) said profit jumped 17 percent as the third-biggest U.S. health insurer began to see a payoff from its acquisition of Coventry Health Care Inc. The company raised its 2013 earnings forecast.
Net income rose to $536 million, or $1.49 a share, in the second quarter, the Hartford, Connecticut-based carrier said in a statement today. Earnings excluding one-time items topped analyst estimates by 12 cents a share. Full-year profit is now expected to be $5.80 to $5.90 a share, Aetna said. The previous outlook was for $5.70 to $5.85.
Aetna completed its purchase of Coventry in May, part of an effort to gear up for higher growth in Medicaid and Medicare, the government insurance programs for the poor and elderly. While that deal boosted enrollment, Aetna also benefitted from low medical costs, mirroring better-than-estimated profit reports turned in this month by UnitedHealth Group Inc. and WellPoint Inc. (WLP), the top two insurers.
Aetna reported “commercial and Medicaid medical costs better than expected,” said Brian Wright, a Monness, Crespi, Hardt & Co. analyst, in a note to clients today. “The addition of Coventry for two months of the quarter is likely impacting the magnitude of the increase” compared with last year.
Second-quarter revenue climbed 31 percent to $11.6 billion, the company said. Enrollment rose 22 percent to 22 million people.
Date: Jul 31, 2013