By TOM MURPHY
AP Health Writer
Aetna’s second-quarter profit jumped 52 percent, topping Wall Street expectations, and it raised its 2017 forecast again, this time well beyond analyst projections.
The nation’s third largest health insurer said Thursday that it now expects adjusted earnings of between $9.45 and $9.55 per share for the year, a big hike from its previous forecast for $8.80 to $9 per share. The top end of that range sits about a dollar above the company’s initial forecast for 2017 earnings of at least $8.55 per share. It’s also well above industry analyst per share projections of $8.98, according to a poll by FactSet.
Shares appeared headed for an all-time high two hours before the opening bell Thursday.
Health insurance is Aetna’s main business, 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 into government-funded Medicare and Medicaid programs.
Quarterly earnings jumped to $1.2 billion, from $791 million last year, even though its total revenue slipped and enrollment fell as the company pulled back from the Affordable Care Act’s health insurance exchanges.
Aetna Inc. plans to completely leave the exchanges next year after scaling back its participation to only a handful of states this year. The insurer expects to lose $200 million before taxes this year on ACA-compliant coverage it sells on and off the law’s exchanges, which have proven to be a big money loser for several insurers.
Health care costs, by far the insurer’s biggest expense, also fell 6 percent in the second quarter to $10.58 billion.
Adjusted results totaled $3.42 per share for the Hartford, Connecticut, insurer. Revenue excluding capital gains and losses came to $15.5 billion.
Analysts expected, on average, earnings of $2.37 per share in the second quarter on $15.24 billion in revenue.
(© Copyright 2017 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)