Aetna Easily Exceeds 2Q Expectations

AP
August 02, 2018 - 8:37 am
Aetna

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By TOM MURPHY
AP Health Writer

HARTFORD, Conn. (WTIC and AP) - Aetna easily topped second-quarter earnings expectations as another drop in benefit expenses and lower taxes helped the nation's third-largest health insurer.

Net income inched up less than 1 percent to $1.21 billion, while earnings adjusted for non-recurring gains totaled $3.43 per share, the insurer said Thursday.
 
Analysts expected, on average, $3.07 per share, according to Zacks Investment Research.
 
Aetna didn't offer a 2018 forecast or discuss results with analysts Thursday due to its pending acquisition by the drugstore chain and pharmacy benefit manager CVS Health Corp. The companies announced that roughly $69-billion deal late last year and expect it to close in the second half of 2018. But they still need regulatory approval.
 
In the second quarter, Aetna's adjusted revenue fell slightly due partially to the sale of a group life insurance business last year. But it still matched analyst expectations at $15.46 billion.
 
The insurer's benefit costs fell 4 percent to $10.67 billion, and income taxes plunged 30 percent to $449 million.
 
Benefit costs also dropped in the first quarter, helped by the insurer's decision to retreat from the Affordable Care Act's health insurance exchanges. Aetna and some other big, national insurers like UnitedHealth Group Inc. backed away from that market after absorbing heavy losses.
 
Health insurance is Aetna's main product, and most of its enrollment comes from commercial coverage sold through employers or directly to individuals. Total enrollment stayed largely flat at about 22 million in the quarter.
 
CVS Health Corp. wants to use that enrollment base to move deeper into managing customer health, mostly through the chain's nearly 10,000 retail stores. The company plans to expand the health services it offers at those locations and get more involved in helping patients stay on their medicines or monitor chronic conditions like diabetes.
 
Aetna executive have said the CVS deal offers a chance to simplify health care and make it more responsive to what their customers need.

Shares of Hartford, Connecticut-based Aetna Inc. are up more than 3 percent this year.  
 
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