U.S. health insurer
) reported its fourth quarter 2012 earnings of 94 cents per share
a couple of pennies shy of the Zacks Consensus Estimate of 96
cents per share. Earnings also decreased 3% year over year.
The lower-than-expected earnings of the company were the
result of higher operating expense partly offset by revenue
For FY12, operating income came in at $5.13 per share, in line
with the Zacks Consensus Estimate of $5.13 per share, but down 1%
year over year.
Aetna's total revenue for the reported quarter grew 5% year
over year to $8.96 billion, led by higher Health Care premiums in
each of the company's Commercial, Medicare as well as Medicaid
businesses. Reported revenue was higher than the Zacks Consensus
Estimate of $8.93 billion.
For FY12 revenue was $35.5 billion, up 6.0% year over
Operating expenses were $1.92 billion, up 5.0% year over year.
Operating expense ratio was 19.4 % compared with 21.4% in the
Pre-tax operating margin was 6.5 % for the reported quarter,
down 122 basis points year over year.
Aetna's Health Care segment recorded revenues of $8.29
billion, up 4.3% year over year. Total premium increased 3.0%
year over year to $5.3 billion.
Total medical membership increased by 64,000 sequentially to
18.242 million following the acquisition of Genworth Financial's
Medicare Supplement business.
The company's Group Insurance revenues climbed 9.5% year over
year to $534.7 million. The segment's operating earnings
increased by 63% year over year to $45.3 million.
At Large Case Pensions, revenues increased by 25.5% year over
year to $131.0 million and operating earnings increased by 4.3%
year over year to $4.4 million.
Aetna reiterated FY13 projected operating earnings per share
of a minumum of $5.40
Though the quarter results came in lower than our
expectations, the company performed well on a full year basis.
Strong growth in membership to more than 18.2 million medical
members increased revenues by approximately 6% over 2011 and
effective reduction in operating expense ratio.
We expect favorable performance from Aetna going forward.
The company has made considerable investments in products and
technology, with intention to extend its core health business and
also to capitalize on exciting new consumer and provider
opportunities emerging in the marketplace.
Aetna's strong operating results and significant capital
generation will allow it to make further investments. We expect
the company to continue performing well in 2013 backed by the
performance of the Medicaid and Medicare segments, fast growing
health services segment and a strong balance sheet.
Performance of Other Health Insurers
UnitedHealth Group Inc.
), as always, was the first to report the results. The company
reported earnings of $1.20 per share, in line with the Zacks
Consensus Estimate of $1.20 per share. Earnings, however,
increased 2.6% on a year-over-year basis.
) reported earnings of $1.03 per share, beating the Zacks
Consensus Estimate of 95 cents.
Health Net Inc.
), earnings of 36 cents per share lagged a penny behind the Zacks
Aetna currently retains a Zacks Rank #3 (Hold).
AETNA INC-NEW (AET): Free Stock Analysis
HEALTH NET INC (HNT): Free Stock Analysis
UNITEDHEALTH GP (UNH): Free Stock Analysis
WELLPOINT INC (WLP): Free Stock Analysis
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