Aetna Q3 Earnings Fall 1.4% – Raises Annual Guidance

October 28 00:00 2011

New York, October 28 ( – Aetna’s Q3 earnings fell 1.4% primarily due to voluntary early-retirement costs and a drop in revenue on a slip in membership. However, the company was more optimistic about its full-year earnings guidance which it raised to $5 a share from its July forecast of $4.60 to $4.70 a share. It is the third time that Aetna has projected a new outlook from its original forecast in February. Aetna also forecast 2012 per-share earnings of at least $4.80 whereas analysts expect it to be $4.89.

The healthcare benefits provider has made better profits in recent quarters because consumers are using fewer health-care services in this shaky economy. It is also diversifying its operations by making more acquisitions including a $600 million deal to acquire Prodigy Health Group, an administrator of self-funded health-care plans.

Aetna posted a profit of $490.4 million, or $1.30 a share, down from $497.6 million, or $1.19, a year earlier. Its earnings rose to $1.40 from $1 excluding items such as voluntary early-retirement costs and realized capital gains. However, its revenue, excluding capital gains, slipped 0.7% to $8.4 billion. Analysts had forecast earnings of $1.15 cents on revenue of $8.31 billion.

Shares closed Wednesday at $38.90 and were inactive premarket. The stock has risen 29% over the past year.