Aetna Beats Profit Estimates on Government Insurance Growth
Aetna Inc., the No. 3 U.S. health insurer by enrollment, raised its full-year earnings forecast after reporting profit that topped analysts’ estimates as it added more members in government insurance programs.
Second-quarter operating profit was $2.05 a share, Hartford, Connecticut-based Aetna said Tuesday in a statement. Analysts had estimated $1.82 a share on average. Operating profit will probably be at least $7.40 a share this year, the company said, up from a forecast in April for $7.20 to $7.40.
Aetna agreed last month to buy Humana Inc. to expand in Medicare, while Anthem Inc. announced a deal for Cigna Corp. The health-insurance industry is consolidating as it absorbs new customers and contends with added regulation from President Barack Obama’s Patient Protection and Affordable Care Act.
By buying Humana for about $35 billion, Aetna gains 14.2 million medical customers, including 3.2 million in the private health plans for the elderly known as Medicare Advantage. Aetna has said it expects the deal to close in the second half of next year.
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