Aetna Earnings: The Streak is Broken

S&P 500 (NYSE:SPY) component Aetna Inc. (NYSE:AET) reported net income above Wall Street’s expectations for the third quarter. Aetna is a health insurance company. It provides its customers, ranging from individuals to employer groups to governmental units, with traditional and consumer-directed health care benefits products and related services, such as medical, pharmaceutical, dental, behavioral health, group life, and disability plans.

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Aetna Inc. Earnings Cheat Sheet

Results: Net income for the medical-HMO rose to $499.2 million ($1.47 per share) vs. $490.4 million ($1.30 per share) in the same quarter a year earlier. This marks a rise of 1.8% from the year-earlier quarter.

Revenue: Rose 5.2% to $8.92 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Aetna Inc. beat the mean analyst estimate of $1.34 per share. It beat the average revenue estimate of $8.68 billion.

Quoting Management: “Aetna’s strong performance in the third quarter is the result of our diversified business model, and demonstrates the rigor with which we manage our operations,” said Mark T. Bertolini, Aetna chairman, CEO and president. “We’ve achieved our full-year medical membership guidance level of approximately 18.2 million medical members and remain focused on a disciplined balance between profitability and growth.”

Key Stats:

The profit increase last quarter ends a two-quarter streak of year-over-year profit decreases. In the second quarter, net income fell 14.7% while the figure dropped in the first quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of $1.31 versus a mean estimate of net income of $1.25 per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $1.09 a share to $1.10 over the last thirty days. For the fiscal year, the average estimate has moved up from $5.03 a share to $5.08 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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