AP Health Writer

HARTFORD, Conn. (CBS Connecticut and AP) – Aetna booked a $381-million, first-quarter loss mainly due to its failed bid for rival Humana, but the nation’s third largest health insurer still beat earnings expectations and raised its 2017 forecast.

Aetna says it now expects adjusted earnings of $8.80 to $9 per share for the full year, up from its previous projection for at least $8.55 per share and more in line with Wall Street forecasts.

Analysts expect, on average, earnings of $8.88 per share for 2017, according to FactSet.

In the first quarter, Aetna reported earnings of $2.71 per share, adjusted for one-time gains and costs, on $15.24 billion in operating revenue, which excludes investment income.

Analysts expected adjusted earnings of $2.36 per share on $15.48 billion in revenue, according to Zacks Investment Research.

Health insurance is Aetna’s main product, and most of its enrollment comes from commercial coverage sold through employers or directly to individuals. But the insurer and its competitors also have been expanding their stakes in the government-funded Medicare and Medicaid programs.

The insurer’s revenue slipped in the first quarter due in part to the suspension of a health insurance fee and a drop in commercial enrollment. Aetna, like other insurers, has drastically scaled back the coverage it sells on the Affordable Care Act’s public exchanges after losing millions of dollars. The insurer sold coverage on exchanges in only four states this year, compared with 15 last year.

In February, Aetna ended a planned, $34-billion purchase of Medicare Advantage provider Humana after a federal judge rejected the deal. Antitrust regulators had sued to stop that deal and a separate combination of the insurers Anthem Inc. and Cigna Corp. last summer.

The deal would have given Aetna the opportunity to significantly broaden its presence in Medicare Advantage coverage, which involves privately run versions of the federal Medicare program for people who are over 65 or disabled.

Aetna had to pay Humana a $1 billion breakup fee once the deal was called off.

Days after calling off the Humana deal, Aetna told shareholders it was doubling its quarterly cash dividend to 50 cents a share and that it would buy back millions of shares.

Aetna ceased its dividend increases after announcing the Humana bid in the summer of 2015.

Shares of Aetna Inc., based in Hartford, Connecticut, have climbed 10 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen nearly 7 percent. The stock has risen 22 percent in the last 12 months.

(© Copyright 2017 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.) 


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