Thursday, August 14, 2014

Aetna says Coventry purchase boosted second-quarter profit

A trader points up at a display on the floor of the New York Stock Exchange August 20, 2012.

Credit: Reuters/Brendan McDermid

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(Reuters) - Aetna Inc (AET.N), the third-largest U.S. health insurer, on Tuesday reported a higher second-quarter profit, helped by last year's acquisition of Medicare and Medicaid provider Coventry Health Care.

Aetna said it was raising its forecasts for 2014 profit and customer growth after ending the quarter with a record 23.1 million members. It also said it expected the pace of the rise in medical costs outside of its government business to be at the lower end of its expectations.

Medical costs are an important component of profit for Aetna, which sells insurance both through employers and for government-paid programs. It is one of the largest sellers of new insurance plans offered to individuals on the exchanges created by President Barack Obama's healthcare reform law.

Aetna, which closed on its acquisition of Coventry in May 2013, said it now expected the deal to deliver more operating profit per share in 2014 than it had previously thought, raising the range to 55 cents to 60 cents.

Aetna reported net income of $549 million, or $1.52 per share, up from $536 million, or $1.49 per share, a year earlier.

Based on its second quarter, the company raised its 2014 earnings outlook to a range of $6.45 to $6.60 per share from $6.35 to $6.55.

(Reporting by Caroline Humer; Editing by Lisa Von Ahn)

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