Posted on 29 Apr 2010
The third-biggest U.S. health insurer, Hartford, Connecticut-based Aetna Inc., raised its 2010 earnings forecast after profit climbed 29 percent on cost cutting and premium increases.
First-quarter net income grew to $562.6 million, or $1.28 a share, from $437.8 million, or 95 cents, a year earlier, Aetna said today in a statement. Revenue rose less than a percent to $8.62 billion.
Aetna increased its full-year projection after reporting lower-than-expected medical costs in the quarter, said Chief Executive Officer Ronald A. Williams. The company spent 82.5 percent of premiums it collected on members' medical care, down from 83 percent a year earlier. Barclays Capital analyst Joshua Raskin wrote in a note today "that the results were much better than expected."
Aetna had announced 1,200 job cuts last year to cope with declining enrollment as well as the potential effects of the health-care overhaul in Washington.
“We are just now entering the regulation development phase,” Williams said on a conference call today. “Much in the legislation is left to be determined.”